Shares in the Commonwealth Bank jumped after it announced a deal to settle a court case over massive breaches in money laundering regulations.
A short time ago, they were up 2.2% to $70.25. The other major banks were up about 1% in a positive market.
The bank has agreed to pay $700 million, the largest civil penalty in Australian corporate history, and $2.5 million in AUSTRAC’s legal costs.
The civil proceedings follow an investigation into the use of intelligent deposit machines which, it is claimed, became the outlet of choice for criminal syndicates to shift offshore cash from drug deals. AUSTRAC alleged more than 53,800 contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
The Commonwealth had provided for an estimated penalty of $375 million in the half year to December. CBA will now recognise a $700 million provision in its financial statements for the full year ending to June.
CBA Chief Executive Officer Matt Comyn said:
“While not deliberate, we fully appreciate the seriousness of the mistakes we made. Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologise to the community for letting them down.”