Commonwealth Bank has unveiled a bumper profit of almost $10 billion, while also revealing steps it had taken to combat money laundering.
Australia’s biggest lender reported a statutory net profit after tax of $9.9 billion for the 2016-17 financial year. That was 7.6 per cent higher than the previous financial year.
Group income rose 5.1 per cent to $26.0 billion, while the bank’s dividend rose 2.1 per cent to $4.29 per share.
Market share falls slightly
Meanwhile, Commonwealth Bank’s home loan balances jumped 6.5 per cent to $485.9 billion.
However, it’s consumer finance balances (which covers personal loans, credit cards and margin lending) fell 1.2 per cent to $23.6 billion.
The bank’s share of the home loans market fell from 25.3 per cent in 2015-16 to 25.2 per cent in 2016-17.
Credit cards market share also fell, from 24.4 per cent to 24.3 per cent, as did household deposits market share, from 29.2 per cent to 28.8 per cent.
CBA facing high-profile legal action
Commonwealth Bank’s bumper profit came after the bank was accused of more than 53,000 financial violations by Australia’s financial intelligence and regulatory agency.
Last week, AUSTRAC announced that it had initiated civil penalty proceedings in the Federal Court against Commonwealth Bank “for serious and systemic non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006”.
Bank reveals compliance measures
Today, the bank’s chairman, Catherine Livingstone, said the bank took its legal and regulatory obligations very seriously, including its role in helping to fight crime.
“Significant progress has been made on a program of action focused on strengthening its policies and processes relating to its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act,” she said.
Ms Livingstone also said that Commonwealth Bank had taken a range of measures since the second half of 2015, when it learned that its intelligent deposit machines might be linked to money laundering and terrorism financing.
Those measures included:
- Fixing coding errors in the machines
- Changing senior leadership in the key roles overseeing financial crimes compliance
- Upgrading the financial crime technology used to monitor accounts and transactions for suspicious activity
- Starting the upgrade of additional fraud-monitoring technology
Commonwealth Bank has also established a dedicated sub-committee of four directors that will oversee the response to AUSTRAC’s statement of claim and the ongoing execution of the program of action, according to Ms Livingstone.