Risk, exec pay in focus in APRA CBA probe
Australia's financial regulator says its inquiry into the Commonwealth Bank will pay particular attention to issues including how the lender treats risk and pays its executives as the probe enters its final months.
A progress report released by the Australia Prudential Regulation Authority (APRA) on Thursday listed a number of issues for attention, including how CBA's board and senior executives responded to emerging risks and oversaw the handling of problems.
It will also look closely at the influence on CBA's culture of the board and senior executives, the complexity of the bank's policy and decision-making processes and how executive pay is adjusted with reference to good or bad risk outcomes.
The inquiry, which was announced in August following a civil suit filed by the federal government's financial intelligence unit AUSTRAC, aims to identify any shortcomings in the governance, culture, accountability frameworks and practices within CBA and make recommendations on how to address them.
AUSTRAC alleges that CBA had breached money-laundering and terrorism-financing laws by failing to provide on-time reports.
APRA said it has so far conducted around 60 interviews with current and former CBA staff - including board members, executives, senior management and former CBA directors and executives - with 20 more expected in the coming weeks.
The regulator has also held 11 focus groups, involving more than 100 staff members at management level, and has developed an online staff survey.
APRA said more than 10,000 documents, including policies, procedures, committee papers, internal staff communications and human resources data, have been handed over by CBA and are being reviewed as part of the inquiry.
Its panel, which includes former APRA chairman Dr John Laker, former competition watchdog chairman Professor Graeme Samuel and company director and former Reserve Bank of Australia board member Jillian Broadbent, has met with the Australian Securities and Investments Commission (ASIC) and will meet with other relevant agencies to gain a greater insight into CBA's practices, APRA said.
The regulator acknowledged CBA's cooperation with the inquiry and said it will take into account in its final report the remediation initiatives CBA is currently undertaking.
CBA chairman Catherine Livingstone said the inquiry has the company's full support,
"There is work still to be done to strengthen community trust in us," Ms Livingstone said on Thursday.
"We've acknowledged there are aspects of our culture where we could improve."
A final report will be released on April 30.
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