Commonwealth Bank of Australia chief executive Ian Narev will step down by the end of June after Australia's largest bank decided to deal with speculation over his position following allegations the lender breached money laundering and terrorism-financing laws.
Commonwealth Bank of Australia chief executive Ian Narev will step down by the end of June after Australia's largest bank decided to deal with speculation over his position following allegations the lender breached money laundering and terrorism-financing laws.
Chairman Catherine Livingstone said CBA still had confidence in Mr Narev, who has led the bank since December 2011, but the New Zealander is on his way out the door despite a series of record annual profits.
"In discussions with Ian, we have ... agreed it is important for the business that we deal with the speculation and questions about his tenure," Ms Livingstone said in a statement.
"Today's statement provides that clarity and will ensure he can continue to focus, as CEO, on successfully managing the business."
Ms Livingstone denied that the timing of Mr Narev's departure had been brought forward and said succession planning had been under way before AUSTRAC filed civil proceedings in the Federal Court against CBA on August 3.
"This statement has not been rushed," she said.
"It has been carefully considered."
Nonetheless, Commonwealth Bank cited its damaged reputation when revealing Mr Narev's total remuneration for the 12 months to June 30 was down 55 per cent on the previous year.
Mr Narev's bonuses were slashed as he received total remuneration of $5.5 million compared with $12.3 million in 2016.
"Although the group has delivered strong results for shareholders in FY17, the board recognises the significant damage caused to the group's trust and reputation," remuneration committee chairman Sir David Higgins wrote to shareholders.
Ms Livingstone said the exact timing of Mr Narev's departure was dependent on the outcome of the internal and external search process already under way.
CBA last week announced an eighth straight record annual profit of $9.9 billion, but the news was overshadowed by the case filed by Australia's financial intelligence agency.
The Australian Securities and Investments Commission is also investigating Commonwealth Bank for its response to the allegations for any breach of the Corporations Act and whether the lender met its continuous disclosure obligations.
Asic chairman Greg Medcraft last week said CBA should have alerted ASIC in 2015 when it first learnt of a problem in its cash deposit machines that has led to the case being filed by AUSTRAC.
CBA shares were higher in early trade on the ASX, up 42 cents to $80.92 amid a general rise across the major banks and the broader market.
