COMMBANK AGREES TO RECORD A$700M FINE
Lender admits breaching financing laws on 53,750 occasions
THE Commonwealth Bank of Australia (CommBank) agreed to pay a record penalty of A$700 million (RM2.12 billion) to settle explosive money laundering charges brought by Australia’s financial intelligence agency.
The biggest financial penalty in Australian corporate history was almost double the amount CommBank had set aside, signalling the tougher regulatory framework Australian banks face following revelations of widespread misconduct.
It is the second major case new chief executive officer Matt Comyn, who replaced Ian Narev in the wake of the scandal, has settled with regulators in a month after admitting to ratemanipulation allegations.
Australia’s biggest bank admitted it had breached money laundering and terror financing laws on 53,750 occasions, according to an statement of facts tendered in court by both parties.
Suspicious transactions were repeatedly not reported, and monitoring processes failed, it said.
“The money laundered through the CommBank accounts included the proceeds of drug and firearms importation and distribution syndicates — predominantly involving methamphetamine,” said the court document.
CommBank shares were up two per cent in a slightly positive market, even though the fine was by far the biggest in Australian corporate history and almost double the A$375 million it had set aside to deal with the case.
Many of the breaches carried maximum penalties of up to A$21 million each, exposing CommBank to fines running into the billions of dollars.
As part of the settlement — which must be approved by the Federal Court — the bank acknowledged it did not take all the necessary steps to identify, mitigate and manage money laundering and terrorism financing risks.
The bank said it would book a A$700 million provision in its fiscal 2018 results, to be released in August.