CBA in board makeover

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 mid-December 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, inCBA

vestment bank Morgan Stanley has told its clients the CBA remains “overvalued”.

Analyst Richard Wiles also said the historical premium 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 overvalued and execution risks have increased,” Mr Wiles told clients in a note released over the weekend.

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.

Fellow non-executive director Andrew Mohl, who is helping the CBA sell its life insurance arm, will seek reelection for one more year before departing, the CBA said.

The appointment of Mr Whitfield potentially positions him to take over the chief executive role given current chief Ian Narev has announced he will leave by the middle of next year.

Mr Whitfield had a 30-year career with Westpac including as its chief risk officer, group treasurer and Asia advisory board chair.

He joined the NSW Treasury in 2015 after missing out on the top job at Westpac to Brian Hartzer.

“Rob’s broad risk management and public sector experience, as well as his extensive banking experience, will deepen the board’s existing skills and expertise,” CBA chair Catherine Livingstone said.

Shares in CBA closed at $74.41.