CBA shares lift after copping record fine

INVESTORS have welcomed the resolution of an antimoney-laundering and counter-terrorism-financing case brought against the Commonwealth Bank that has resulted in the biggest civil fine in Australian corporate history.

Shares in the CBA jumped more than 2 per cent in early trade yesterday after it announced that it would pay a $700 million fine to settle the case brought by Australian Transaction Reports and Analysis Centre. MISTAKES: CBA chief Matt Comyn says the agreement is an important step.

In settling the case, the bank has admitted to breaching the nation’s anti-moneylaundering and counterterrorism-financing laws more than 50,000 times.

CBA chief Matt Comyn said the settlement brought certainty.

“While not deliberate, we fully appreciate the seriousness of the mistakes we made,” he said.

“Our agreement today is a clear acknowledgment of our failures and is an important step towards moving the bank forward.”

Morgan Stanley analyst Andrei Stadnick said the settlement was “incrementally positive given it removes one of the uncertainties facing” the nation’s biggest bank.

The civil penalty must be formally approved by the Federal Court.

CBA admitted it failed to provide 53,506 threshold transaction reports on time to the nation’s financial intelligence agency, which must be informed of transactions of $10,000 or more.

All up, some $625 million in funds of which Austrac should have been made aware flowed through the bank.

The breaches came about after the bank’s intelligent deposit machines — a type of ATM that allows money to be deposited into a CBA account — failed to automatically provide the reports to Austrac from November 2012 to September 2015.

That system breakdown came to light after two men in western Sydney were charged with money laundering in 2015, and receipts for deposits at the ATMs were found at their residences.

The bank also admitted it failed to correctly monitor transactions on 778,370 accounts and failed to monitor customer accounts even after it became aware of suspected money-laundering activity.

CBA shares closed 1.4 per cent higher at $69.69.