Wednesday , May 23 2018

Commonwealth Bank of Australia profit rises

epa06123757 People walk by a Commonwealth Bank (CBA) branch in Brisbane, Queensland, Australia, 03 August 2017 (issued 04 August 2017). The Commonwealth Bank has been accused of a systemic failure to comply with anti-money laundering and counter-terrorism financing laws. The federal government's financial intelligence unit Australian Transaction Reports and Analysis Centre (AUSTRAC) on 03 August, launched civil penalty proceedings in the Federal Court, accusing the lender of more than 53,700 contraventions of law.  EPA/DAN PELED  AUSTRALIA AND NEW ZEALAND OUT


Commonwealth Bank of Australia reported its eighth consecutive year of record profit, driven by growth in mortgage and business lending.
Cash profit, which excludes one-time items, rose 4.6 percent to A$9.88 billion ($7.8 billion) in the 12 months ended June 30, from A$9.45 billion a year earlier, the Sydney-based lender said in a filing Wednesday. That compares with the A$9.79 billion median estimate of 13 analysts, according to data compiled by Bloomberg.
“This was a good, solid performance” David Ellis, banking analyst at Morningstar Inc., said.
However, Ellis warned the results risk being “overshadowed” by allegations from the nation’s financial crimes agency that the bank breached money-laundering and terrorist-financing laws more than 50,000 times.
The board stripped CEO Ian Narev and other senior executives of their short-term bonuses after “consideration to risk and reputation matters.” Commonwealth Bank has blamed a software coding error for most of the alleged breaches.
There is a “limited” amount the bank can say about the proceedings, considering they are before a court, Commonwealth Bank said. “At this time it is not possible to reliably estimate the possible financial effect.”
The maximum penalty is A$18 million per breach. Gaming company Tabcorp Holdings
Ltd. in March agreed to pay a A$45 million penalty to settle 108 breaches of the legislation, the biggest civil corporate penalty in Australia.
The bank has established a dedicated sub-committee of four directors to oversee its response to the suit and an upgrade of its financial-crime monitoring technology, Chairman Catherine Livingstone said.
The bank said increased competition in business lending had largely offset the benefit of home loan repricing.

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