A key regulator in Australia’s financial services industry said this week that the charges accusing Commonwealth Bank of Australia (CBA) of engaging in money laundering will not hobble its ability to operate.
According to news reports from Reuters, Australian Prudential Regulation Authority (APRA) chairman Wayne Byers said Wednesday that CBA is “financially sound.” Byers’ assessment came amid remarks to a parliamentary committee and pointed directly to recent events surrounding the company.
As has been widely reported, CBA, the largest lender in the country, was sued by Australia’s financial intelligence organization, AUSTRAC. The ongoing suits, which began last month, allege the bank had been tied to more than 53,000 breaches of money laundering laws spanning 2012 to 2015.
The financial impact, should fines be levied in the AUSTRAC action or from an additional class action suit, would be considerable, with billions of dollars in fines in the possible offing. Beyond stock price gyrations — in which shares have tumbled approximately 9 percent since the beginning salvos of the case — the underlying operations of the bank are in place, said Byers.
“Our focus is on the prudential standing of the bank … there isn’t any suggestion that this is an issue that threatens the soundness of the bank,” Byers remarked.
The charges are in place against the company, though the headlines have had what Byers called a “negligible impact in terms of loss of customers, loss of deposits or any other impact that would make a material difference to the viability of the bank.”
AUSTRAC has said it is investigating CBA, as is the Australian Securities and Investment Commission (ASIC).
The bank has said a coding error was behind the money laundering transactions under fire and intends to defend itself in court, noted Reuters.