Commonwealth Bank CEO Ian Narev is leaving.
The head of Australia’s largest company has faced escalating pressure from a series of scandals, the latest with bank in court accused of breaching anti-money-laundering regulations.
Narev, aged 50, has been in the job since the end of 2011, bringing the bank to a record full year profit of almost $10 billion, and paying out billions in dividends to shareholders during his tenure.
Commonwealth chair Catherine Livingstone says Narev will retire by the end of the 2018 financial year.
“In discussions with Ian we have also agreed it is important for the business that we deal with the speculation and questions about his tenure,” she says.
In a media briefing, Livingstone would not connect Narev’s decision to leave with the money-laundering scandal.
“We have full confidence in Ian as CEO … recognising his huge achievements,” she told the briefing.
The bank’s board of directors last week axed short term bonuses for Narev and his senior executives.
Livingstone then said: “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.”
This followed an investigation by the the financial intelligence and regulatory agency, AUSTRAC, into alleged breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act involving combined cash deposits of $624.7 million.
Last week the bank reported a 4.6% increase in full year cash profit to $9.88 billion and a 7.6% surge in net profit after tax to $9.93 billion.
The Commonwealth CEO, along with the other major banks, has been called before a parliamentary committee to face questioning on the culture within Australia’s big banks.
The fact that no senior executive has lost their job following the scandals, including poor financial planning advice, has become a political issue with the Labor Opposition calling for a Royal Commission.
Narev, a former partner of McKinsey’s New York, Sydney and Auckland offices, joined the bank in May 2007 as Group Head of Strategy, responsible for corporate strategy development, mergers and acquisitions and major cross business strategic initiatives.
Here is the bank’s statement:
Monday, 14 August 2017 (Sydney): The Chairman of the Commonwealth Bank of Australia, Catherine Livingstone AO, said today that the Board had decided to provide details of its planned Chief Executive succession process to ensure the market is fully informed and to provide certainty for the business.
Managing Director and Chief Executive Officer, Ian Narev, will retire by the end of the 2018 financial year, with the exact timing dependent on the outcome of an ongoing comprehensive internal and external search process.
Succession planning is an ongoing process at all levels of the Bank. In discussions with Ian we have also agreed it is important for the business that we deal with the speculation and questions about his tenure. Today’s statement provides that clarity and will ensure he can continue to focus, as CEO, on successfully managing the business.