CBA boss takes blame

NAREV SAYS SORRY FOR ALLEGED BREACHES

COMMONWEALTH Bank boss Ian Narev has taken the blame for the lender’s alleged breaches of anti-money laundering laws and apologised to retail shareholders.

Mr Narev, who has announced he will step down following the allegations, said yesterday the bank was focused on “putting things right” after failing to meet the appropriate standards and letting down stakeholders.

“l am sorry for that (and) as the chief executive I take accountability for it and can assure you that we are taking it extremely seriously,” Mr Narev said at a Morningstar investor conference in Sydney.

The proposed action launched by AUSTRAC in August alleges CBA failed to provide on-time reports for 53,506 cash transactions of $10,000 or more between November 2012 and September 2015.

CBA shares fell almost 12 per cent in the month following the allegations, but have since recovered some of the losses.

At the sharemarket close yesterday, CBA was trading 1.3 per cent higher at $76.30

Mr Narev, who remained optimistic about the economy despite Thursday’s poor retail trade figures showing the sharpest monthly fall in more than four years, said the bank had damaged stakeholders’ trust.

“At the heart of the relationship of the Commonwealth Bank and all its stakeholders lies trust — we can never take that for granted and we have a lot of work that we have to do,” he said.

“It is my priority in my remaining time as chief executive to really restore that trust.”

Morningstar senior analyst David Ellis said he was confident CBA would work through the difficulties, having made “some good first steps”.

He said that while CBA faces fines of more than $1 billion, it was safeguarded by its recent $3.8 billion sale of its Australian and New Zealand life insurance businesses and the option of selling its asset management business for between $4 billion and $5 billion.

Mr Ellis valued the company’s shares at $85, almost 12 per cent higher than the lender’s current price.

Mr Narev announced in August he would leave his role by the end of June, following the bank’s decision to “deal with speculation” over his position during the allegations.

His short-term bonuses were also slashed, more than halving his annual pay to $5.5 million from $12.3 million the year before.

Yesterday, the outgoing chief executive didn’t hint whether the bank had settled on a successor, but guaranteed “the next will be better than the current one”.

AAP