The Commonwealth Bank now faces another inquiry, this time by the banking regulator, APRA (Australian Prudential Regulation Authority) which is investigating governance, culture and accountability at Australia’s biggest company.
APRA chairman Wayne Byres says the inquiry aims to provide the community with confidence that any shortcomings identified are promptly addressed.
“The Australian community’s trust in the banking system has been damaged in recent years, and CBA in particular has been negatively impacted by a number of issues that have affected the reputation of the bank,” he says.
The bank has been hit by a series of scandal with the latest landing the CBA in Federal Court accused of massive breaches of anti-money laundering laws.
Corporate regulator ASIC (Australian Securities and Investments Commission) has confirmed it is investigating the bank over its conduct in the money laundering scandal.
And shareholders have launched a class action against the Commonwealth Bank over the drop in share value when the money laundering scandal broke this month.
CBA chair Catherine Livingstone says events over recent years have weakened the community’s trust in the bank.
“We have been working hard to strengthen trust, and will continue to do so,” she said in response to the APRA inquiry.
“We welcome this opportunity for independent parties to review the work we have already undertaken and advise on what more we can do.”
CBA CEO Ian Narev says he’s confident that the bank’s 50,000 staff come to work each day to give their best, for the benefit of customers.
“At the same time, we know that our mistakes have hurt our reputation,” he says.
“An independent and transparent view on the work we have done, and the work we still have to do, is an important element of strengthening trust. So this inquiry has our full support, to ensure it is as effective as possible.”
APRA says CBA is a well-capitalised and financially sound institution.
“However, beyond financial measures, it is also critical to the long-run health of the financial system that the Australian community has a high degree of confidence that banks and other financial institutions are well governed and prudently managed,” says chairman Wayne Byres.
“Given its (CBA’s) position in the Australian financial system, it is critical that community trust is strengthened.
“A key objective of the inquiry will be to provide CBA with a set of recommendations for organisation and cultural change, where that is identified as being necessary.”