We weren’t being unethical, CBA says, as profit soars to $9.9 billion

THE Commonwealth Bank, posting a $9.9 billion profit today, says it “has no reason to believe” there was any commercial incentive behind its alleged breaches of anti-money laundering laws.

Commonwealth Bank chief Ian Narev.

THE Commonwealth Bank says it “has no reason to believe” there was any intent or commercial incentive behind its alleged breaches of anti-money laundering and counter-terrorism financing laws.

“The board notes that it has no reason to believe that the allegations arose from deliberate or unethical behaviour, or any commercial motive,” CBA chair Catherine Livingstone said in a statement today.

It came as the bank posted a net profit of $9.93 billion for the year to June — up 7.6 per cent on the previous year.

The group posted a cash profit, which is a measure of underlying earnings, of $9.88 billion — an eighth straight record. Analysts had expected a 12-month cash profit of about $9.8 billion.

“Commonwealth Bank’s performance this year has again contributed to the financial wellbeing of our customers, shareholders, our people and the Australian economy,” chief executive Ian Narev said.

The CBA also revealed it was in talks with potential buyers for its Australia and New Zealand life insurance businesses.

Regulator Austrac — the Australian Transaction Reports and Analysis Centre — alleges the CBA failed to provide on-time reports for more than 53,500 cash transactions of $10,000 or more through its Intelligent Deposit Machines between November 2012 and September 2015.

CBA chair Catherine Livingstone says the bank has “no reason to believe” it behaved unethically.

The bank, which has already blamed a coding error, today said a subcommittee of four directors would oversee its response to the civil proceedings launched by Austrac in the Federal Court.

Australia’s biggest bank said that, since it discovered and fixed the error in 2015, it had changed oversight of financial crimes compliance, recruited more than 50 specialists and upgraded monitoring.

“Commonwealth Bank takes its legal and regulatory obligations very seriously, including its role in working with Austrac, other agencies and law enforcement bodies, to fight crime,” Ms Livingstone said.

“It is committed to maintaining a strong, co-operative working relationship with Austrac.”

The CBA on Tuesday slashed short-term bonuses for chief executive Ian Narev and fellow executives in response to the allegations.

“The board’s actions reflect the focus we are taking on improving the trust among people, customers, businesses and communities that the bank exists to serve,” Ms Livingstone said.

AAP