Australia’s biggest bank reveals further woes

The Commonwealth Bank of Australia (CBA) was thrown into turmoil by a civil case launched earlier this month by financial intelligence agency AUSTRAC for alleged “serious and systemic non-compliance” with the laws.

The case has overshadowed record annual profits and forced the bank to announce the retirement of its chief executive.

The embattled lender, Australia’s largest firm by market capitalisation, has now said it was working to remedy other errors worth millions of dollars linked to customers’ insurance, transactions, and staff pension payments.

“We are providing an additional update on other issues we are putting right for our customers and employees,” CBA said in a statement late Monday, adding that the statement was “not an exhaustive list of all regulatory matters”.

The shortfall in staff pension payments is initially expected to amount to Aus$16.7 million (US$13 million) plus interest, with the full costs yet to be finalised.

Refunds to customers over disputed card transactions added up to some Aus$5 million, while the bank said it had notified corporate regulator ASIC over a probe into whether it did not cancel insurance to some deceased estates.

Following scrutiny over the AUSTRAC action, the bank said Monday that chief executive Ian Narev would retire by the end of the 2018 financial year.

The company added last week the pay and bonuses of top executives were to be slashed. CBA could face fines running into billions of dollars from the AUSTRAC case.

The bank is also facing an investigation from ASIC over its handling of the alleged breaches.

The latest revelations are not linked to the regulatory investigations the lender faces.

The Commonwealth has been delivering bumper returns for shareholders in recent years, but has also been hit by scandals over poor financial planning advice and insurance payouts.