The Commonwealth Bank has confirmed it is looking at making a provision on its books for potential costs of the money laundering scandal.
Australia’s largest bank made a statement to the ASX today after a report in the Australian Financial Review put the potential costs between $700 million and $1 billion.
“As part of CBA’s accounts preparation process, the CBA Board will consider a range of factors, including any potential penalty, in determining whether it is appropriate to recognise a provision in accordance with the requirements of Australian Accounting Standards in the half year financial statements in relation to the proceedings,” the bank said in its statement.
“The recognition of any provision in the half year financial statements is subject to finalisation of CBA’s half year financial statements, auditor processes and CBA Board approval.”
The bank is due to release its half year results on Wednesday next week.
The Commonwealth is in the Federal Court facing alleged breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act over combined cash deposits of $624.7 million.
The civil proceedings follow an investigation by Australia’s financial intelligence and regulatory agency, AUSTRAC, 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.
The Commonwealth yesterday found itself in court again, this time accused of unconscionable conduct and market manipulation by setting the bank bill swap reference rate (BBSW).
It is the fourth major bank to face legal action from the corporate regulator ASIC (Australian Securities and Investments Commission) over the BBSW, a key interest determining the pricing of billions of dollars of loans across the economy.