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Australia's Commonwealth Bank CEO calls money laundering scandal career low
[SYDNEY] The chief executive of Australia's biggest bank said on Thursday a money-laundering scandal was the greatest disappointment of his career, as he faced his first public questioning since a finance sector inquiry revealed widespread misconduct.
Matt Comyn was head of Commonwealth Bank of Australia's retail unit when the lender allowed thousands of suspicious transactions to pass through its branches from 2012 to 2015.
The bank's former CEO, Ian Narev, stepped down in the wake of the the scandal, and Mr Comyn was promoted to the top job in January. Four months later, amid a damaging public inquiry into malfeasance across the finance sector, CBA withdrew its defence and agreed to pay a record A$700 million (S$697 million) penalty.
"That particular matter was the greatest disappointment of my professional career," Mr Comyn said during his first appearance at a Senate hearing, and the first by a bank boss since the misconduct inquiry began.
"It was a number of failures of both capability and understanding of the steps that were required to ensure that we were adequately discharging our financial crimes obligations."
Australian bank bosses are required to face regular public questioning by parliament. Mr Comyn was the first to testify since the inquiry, called a Royal Commission, commenced in February.
Asked if he could confirm that no money laundering was taking place at the bank now, Mr Comyn said it was "one of the many things that I worry about frequently".
The money laundering scandal was one of the triggers for the government to reluctantly agree to hold the powerful Royal Commission.
Since then, the inquiry has heard accounts of wide-ranging misconduct across the financial sector, including claims that banks paid staff bonuses for selling inappropriate products, charged customers fees for no service, and in some cases charged fees to the accounts of dead people.
Mr Comyn said the promise of incentives may have helped create the corporate culture which permitted such abuses, and which was slammed by the judge running the inquiry in an interim report last month.
He said the bank had cut A$100 million a year in incentives, from those available to branch staff to himself personally.
"Incentives have played a role in some of the issues that we are facing now, it's very hard to conclude otherwise," Mr Comyn said.
Asked why it had taken the Royal Commission to make the bank repair its culture, Mr Comyn said: "I don't think there's an acceptable explanation ... other than to say we have been too slow to get to the root cause (and) we haven't fixed the issues."
Most major Australian banks and the country's centre-right government, a traditional ally of the sector, had long opposed holding a Royal Commission. On Thursday, Mr Comyn said CBA now acknowledges it was wrong to oppose the inquiry.