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Narev exit 'not rushed' by court case: CBA

Commonwealth Bank chief executive Ian Narev will step down by the end of June after Australia's largest bank decided to "deal with speculation" over his position following allegations the lender breached money-laundering and terrorism-financing laws.

Chairman Catherine Livingstone said CBA retained confidence in Mr Narev but the New Zealander, who has led the bank to a series of record profits and last week said he wanted to extend his six-year tenure, is still on his way out.

"In discussions with Ian, we have ... agreed it is important for the business that we deal with the speculation and questions about his tenure," Ms Livingstone said in a statement to the ASX.

"Today's statement provides that clarity and will ensure he can continue to focus, as CEO, on successfully managing the business."

Ms Livingstone denied that the timing of Mr Narev's departure had been brought forward and said succession planning had been under way before AUSTRAC filed civil proceedings in the Federal Court against CBA on August 3.

"This statement has not been rushed," she said.

"It has been carefully considered."

Nonetheless, Commonwealth Bank cited its damaged reputation when revealing Mr Narev's total remuneration for the 12 months to June 30 was down 55 per cent on the previous year.

Mr Narev's bonuses were slashed as he received total remuneration of $5.5 million compared to $12.3 million in 2016.

"Although the group has delivered strong results for shareholders in FY17, the board recognises the significant damage caused to the group's trust and reputation," remuneration committee chairman Sir David Higgins wrote to shareholders.

Ms Livingstone said the exact timing of Mr Narev's departure was dependent on the outcome of the internal and external search process that was already under way.

She said the most important consideration was finding a chief executive with personal integrity.

"Someone with a very strong moral compass because, in these roles, the right and wrong are clear but the judgement calls that have to be made along the way can be very challenging," Ms Livingstone said.

"Those are the qualities we have currently in Ian and we would seek to ensure we have those in his successor."

CBA last week announced a $9.9 billion annual profit - its eighth straight record result - but the news was overshadowed by the case filed by Australia's financial intelligence agency.

Corporate watchdog ASIC is also investigating Commonwealth Bank for its response to the allegations for any breach of the Corporations Act and whether the lender met its continuous disclosure obligations.

Australian Securities and Investments Commission chairman Greg Medcraft last week said CBA should have alerted ASIC in 2015 when it first learnt of a problem in its cash deposit machines that has led to the case being filed by AUSTRAC.

CBA shares closed 81 cents, or one per cent, higher at $81.31 against the backdrop of a stronger overall market.

Austrlaian Associated PressBack to Breaking News

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