CBA admits to mistakes in AUSTRAC case
Commonwealth Bank chief executive Ian Narev admits the bank made mistakes, but won't say whether anyone was fired following allegations the lender breached money laundering and terrorism financing laws.
Mr Narev is among the executives to have their bonuses slashed in response to regulator AUSTRAC's claims that CBA failed to provide on-time reports for more than 53,500 transactions.
Asked on Wednesday whether anyone had lost their job over the alleged breaches, Mr Narev said only that there had been changes of leadership and responsibility in related areas.
"Where there ought to be accountability, there will be accountability," Mr Narev said.
He also would not say whether he had offered his resignation to chairman Catherine Livingstone.
AUSTRAC alleges CBA failed to provide on-time reports for 53,506 cash transactions of $10,000 or more through its Intelligent Deposit Machines between November 2012 and September 2015.
Mr Narev said CBA became aware of the issue in August 2015 when branch staff noticed potentially suspicious activity and the bank received notice from AUSTRAC of two missing threshold reports.
CBA investigated and uncovered thousands of other missing reports, notifying AUSTRAC before fixing the problem and submitting the delayed reports.
"We know that we've made mistakes; we have fixed a lot of those mistakes and we will continue to look to make our business better and better," Mr Narev said.
The bank's judgement at the time was that it did not need to tell the ASX about the issue, he said.
"You simply can't make a disclosure every time you get a notice from regulators, or you'd be making disclosures every day," Mr Narev said.
Ms Livingstone said any errors would have been unintentional.
"The board notes that it has no reason to believe that the allegations arose from deliberate or unethical behaviour, or any commercial motive," she said.
CBA has blamed a coding error, but has also been looking at how it went undetected and what other safeguards can be introduced.
A sub-committee of four directors will oversee the bank's response to the civil proceedings launched by AUSTRAC in the Federal Court.
CBA said it has changed oversight of financial crimes compliance, recruited more than 50 specialists and upgraded monitoring.
It announced on Tuesday it would pay no short-term bonuses for Mr Narev and his executives for the 2016/17 financial year.
"The board has taken very rapid action based on the reputation of the organisation, which has had an effect on me and the entire team of people," Mr Narev said.
"They did that in a year in which the overall financial results were very strong - they've said that reputation overrides everything."
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