The head of Australia's largest bank has been sanctioned over a money-laundering probe. His board also addressed the CEO's future at the bank.
Commonwealth Bank of Australia's stock dropped sharply last week after it emerged that the Sydney-based bank failed to report breaches of money-laundering and terror financing laws.
On Tuesday, CBA said it would «goose egg» Chief Executive Ian Narev, and his top management – the banking industry term for slashing a bonus to zero – over the scandal.
«In reaching this conclusion the overriding consideration of the board was the collective accountability of senior management for the overall reputation of the group,» new CBA chair Catherine Livingstone (pictured above) said in a statement.
CEO's Days Numbered?
On Sunday, Narev had conceded mistakes but vowed to clean up charges by overseer AUSTRAC that CBA fell down on transactions which should have triggered money-laundering alarm bells.
CBA's board also briefly addressed speculation that Narev's days are numbered: «Mr. Narev retains the full confidence of the board,» Livingstone said, without elaborating.
Livingstone and her board colleagues docked their own pay by one-fifth in the current year, which ends next June. The board, she said, «recognised that it has shared accountability» in the scandal.
Software «Error»
Narev has blamed a software update for triggering an «error» in its reporting system that was not detected for more than two years.
CBA reports the year on Wednesday, but the probe will clearly overshadow the bank's operating performance.
Narev has his board's backing for now, but will spend much of his time dealing with the political fallout from the probe: a key opposition politician has called for Australian leader Malcolm Turnbull to set up a commission into how CBA's violations escaped detection for so long.
