Crisis and scandals take toll on Australia’s banking sector

sydney — Australians looking for another reason to bash banks can now add more than 50,000 alleged breaches of money laundering and terrorism financing laws by the nation’s biggest lender.

The country’s financial crime agency on Thursday sued Commonwealth Bank of Australia, alleging the lender failed to report either on time or at all suspicious transactions through its network of automated cash deposit machines totalling more than A$624 million ($497 million). The bank said it will file a statement of defense in court. The case intensifies the reputational This takes away a lot of consumer trust

Andrew Hughes, Lecturer, Australian National University

crisis engulfing Australia’s banking industry.

After a string of scandals, from giving poor advice to wealth-management customers to allegations the nation’s three other biggest banks manipulated a benchmark swap rate, the government has capitalised on public anger and imposed a A$6.2 billion tax on the lenders to help plug a budget deficit. The opposition Labor party has also pledged a wide-ranging inquiry into the financial industry if it wins power at the next election.

“This takes away a lot of consumer trust,” said Andrew Hughes, a lecturer in branding and marketing at Australian National University in Canberra. “It hurts consumer confidence in the entire system. It’s building a picture of a sector that needs more regulation, not less.”

Commonwealth Bank shares fell the most in almost 18 months in Sydney trading, slumping 3.9 per cent to close at A$80.72. — Bloomberg