The CBA is facing a storm of challenges and it's up to Matt Comyn to steer the bank to safe waters

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  • Matt Comyn will take charge of CBA in a hugely risky year for Australia’s largest bank.
  • Legal proceedings over money laundering allegations and the Royal Commission are a threat to the bank’s brand, while at the same time there are risks from technological disruption and a slowing housing market.
  • The banking regulator will release a progress report in its investigation into the bank’s governance and culture.

The market is generally positive about the appointment of Matt Comyn as CEO of the Commonwealth but the banker has some tough work ahead.

UBS, in a note to clients, says Comyn is well regarded by the market and has delivered strong, consistent shareholder returns as head of retail banking.

“However, he faces many challenges: delivering cultural change; addressing reputational damage; technological disruption; an over-leveraged household sector; and a slowing housing market,” write analysts Jonathan Mott and Rachel Bentvelzen.

“Steering CBA though the Royal Commission, the APRA investigation and ongoing legal proceedings will also be a key determinant of Matt’s success.”

Comyn knows what’s ahead. At an analyst briefing, he was asked is he thought he had a particular responsibility as head of retail for some of the issues now facing the bank?

This is a reference to the investigation by AUSTRAC, the federal government’s financial intelligence and regulatory body, which has the bank in court facing alleged breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act over combined cash deposits of $624.7 million.

The breaches involve the bank’s smart ATMs, part of the retail banking division run by Comyn, which were allegedly used by criminal gangs to make deposit from the proceeds of drug deals and cash which could have gone to finance terrorism.

Comyn replied: “As a senior executive who has been here for nearly two decades, and the last five and a half years has been part of the Executive Committee, I certainly feel it is entirely appropriate to share a collective accountability for the issues that we have had.”

Matt Comyn. Image: Supplied

He was stating the bank’s current position that the money laundering issue lies at no one person’s feet but is the collective responsibility of the whole organisation.

“It was challenging insofar as the deep fondness I have for the organisation to see it portrayed like that,” he says.

“There is a lot of work underway, and there is a lot of work to do. And I am going to be very focused on making sure that we strengthen any of the issues that we have seen to date or anything that comes up and lead the organisation through that period.”

The bank’s chair, Catherine Livingstione, repeated the view of “organisation-wide and collective responsibility” for the money laundering issue.

“What I would say is that in terms of Matt, the level of leadership and accountability that he has shown both prior in terms of the program of action but more specifically post the lodging of the AUSTRAC proceedings, give us the confidence that as CEO he understands the issues and is moving very quickly to address those issues,” she told the analyst briefing.

The major banks are facing a regulatory storm in 2018, with 15 government reviews and inquiries into the sector.

The prudential regulator APRA is due tomorrow to release its progress report into the Commonwealth’s governance, culture and accountability.

The banks also this week got in their initial responses to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. That has another year to run.

And next week the Commonwealth is due to post its half year results. This should give some indication of the impact of the money laundering allegations on operating costs.

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