The Commonwealth Bank has set aside almost $600 million to fund potential costs relating to the royal commission into banking, superannuation and financial services and the civil proceedings commenced against it by AUSTRAC.
The bank announced its financial results for the half year to 31 December 2017 to the ASX this morning, with an accompanying statement outlining significant provisions for unforseen but now expected regulatory and compliance costs.
CBA has taken a potential civil penalty of $375 million into account in its results, believing this to be a likely estimate of the penalty a court may impose in relation to the AUSTRAC money laundering case. The figure was determined via "currently available information and legal advice provided to the group".
In addition, the bank has set aside a $200 million kitty for expected costs relating to the royal commission, such as potential legal and remediation program costs.
However, the $575 million regulatory blowout has not hurt the bank's overall financial position, with statutory net profit after tax of $4.89 billion, indicating an increase of 1.2 per cent on the corresponding period.
Outgoing CBA CEO Ian Narev said the key priorities for Australia's largest financial institution has been righting wrongs as well as producing record profits.
“Commonwealth Bank’s performance this year has again contributed to the financial wellbeing of our customers, shareholders, our people and the Australian economy," Mr Narev said. "This is the result of our consistent focus on customer satisfaction, innovation and financial strength.”
He said CBA has been focused on "fixing mistakes" and "becoming a better bank", expressing regret at the need to set aside such a large amount for potential regulatory penalties and the actions that led to it.
"We will continue to work hard to do better," Mr Narev said.
The bank also recorded a loss in financial adviser numbers over January, as did its competitors.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 17 Aug 2018Grandfathering is not in consumers' interests: KellBy Tim Stewart
- 17 Aug 2018Advisers can ‘professionalise’ clients’ philanthropyBy Lucy Dean and Killian Plastow
- 17 Aug 2018Standalone robo-advisers ‘will not attract’ HNW investorsBy Reporter
- 17 Aug 2018Assess super on value not fees, Rice Warner urgesBy Killian Plastow
- 16 Aug 2018ANZ taken to task over ‘misleading’ general adviceBy Reporter
- 16 Aug 2018Faith in adviser ethics fallsBy Reporter
- view all