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CBA scraps Narev's short-term bonus amid money-laundering suit
[SYDNEY] Commonwealth Bank of Australia's board has scrapped short-term bonuses for the 2017 financial year for Chief Executive Officer Ian Narev and other group executives as the nation's largest lender faces allegations it breached money-laundering and terrorist-financing laws.
In reaching its decision, the board "gave consideration to risk and reputation matters impacting the group," Chairman Catherine Livingstone said in a statement on Tuesday. "The overriding consideration of the board was the collective accountability of senior management for the overall reputation of the group." Narev "retains the full confidence of the board," Mr Livingstone said.
The country's financial crime agency, Austrac, sued the bank Aug 3, saying it failed to report on time or at all suspicious transactions totaling more than A$624 million ($497 million). Commonwealth Bank also failed to monitor suspected money laundering even after being alerted by law enforcement agencies, Austrac claimed.
The lender has blamed a software coding error for more than 50,000 alleged breaches.
The allegations are the latest in a series of scandals in Australia's banking industry, ranging from giving poor advice to wealth-management customers to allegations the nation's three other biggest banks manipulated a benchmark swap rate. The opposition Labor party has jumped on the money laundering claims to bolster its calls for a far-reaching inquiry into the banks.
The board has also reduced non-executive director fees by 20 per cent in the current 2018 financial year.