Three go in CBA board overhaul

THE Commonwealth Bank has announced a shake-up of its board, with three nonexecutive directors to leave and a former Westpac high flyer to join in an appointment set to fan leadership speculation.

The boardroom overhaul came as the nation’s biggest lender was given until midDecember to file its defence against allegations it breached anti-money laundering and counter-terrorism financing rules on more than 53,000 occasions.

CBA barrister John Sheahan QC also told a Federal Court directions hearing yesterday the lender would not “in large part” dispute the primary facts alleged by the nation’s dirty money watchdog.

Shares in CBA fell another 1.4 per cent yesterday and the bank has shed close to 12 per cent of its value since the Australian Transaction Reports and Analysis Centre hit the bank with legal action early last month.

Despite the fall, which has wiped close to $17 billion from the bank’s market value, investment bank Morgan Stanley has told its clients the CBA remains “overvalued”.

Analyst Richard Wiles also said the historical premium CBA has consistently traded at against its big four rivals over the past two decades “was getting harder to justify” in the wake of accusations it systematically breached the nation’s dirty money rules. “We believe the stock remains over-valued and execution risks have increased,” Mr Wiles told clients.

CBA yesterday said NSW Treasury Corporation director Robert Whitfield, who formerly headed Westpac’s institutional banking division, would join the board immediately.

Non-executive directors Harrison Young and former Target managing director Launa Inman will leave the board in November.