Finance ‘I won’t be lectured by them’: Premier attacks big banks

‘I won’t be lectured by them’: Premier attacks big banks

Commonwealth Bank
The Commonwealth Bank half year profit has factored in penalties expected from the money-laundering scandal. Photo: AAP
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South Australian Premier Jay Weatherill doesn’t want to be lectured to by the big banks, which he says are money launderers for criminals and terrorists.

His government’s controversial bank levy was due to be debated in Parliament on Wednesday, as the Commonwealth Bank recorded a net profit this year of $9.9 billion – a rise of 7.6 per cent.

“We’re going to take $20 million of that and it’ll still be $9.88 billion, are people seriously crying a river of tears for the banks,” Mr Weatherill told reporters.

“The money launders to organised crime and terrorist groups, are we seriously going to be getting lectures from them?”

The comments were in response to the Commonwealth Bank’s alleged breaches of anti-money laundering and counter-terrorism financing laws.

With anti-money laundering agency AUSTRAC launching its court action just last week, the likelihood of penalties in the millions, or potentially billions, of dollars has not affected CBA’s 2017 financial year results.

The company’s preferred measure of cash profit, which excludes a range of one-off and accounting items, grew a smaller 4.6 per cent to $9.88 billion.

Mr Weatherill said the SA bank levy would be distributed to small and medium-sized businesses in his state.

But a Galaxy poll released this week found 65 per cent of small business owners opposed the tax and Opposition Leader Steven Marshall said the premier should “cut his losses” and kill it off.

Dividends edge higher

The rise in profit has allowed the Commonwealth Bank to increase its payout to shareholders from a total of $4.20 last financial year to $4.29 in 2017.

The modest 2.1 per cent rise in shareholder payments likely reflects CBA’s need to increase its capital — or safety reserves to protect against severe losses — in light of tougher regulatory requirements being phased in by the bank regulator, APRA.

At 10.1 per cent, CBA is currently short of APRA’s proposed 10.5 per cent requirement, which will take force from January 1, 2020.

As part of its profit announcement, CBA also revealed that John Symond had exercised an option to sell his remaining 20 per cent stake in Aussie Home Loans to the bank.

The Commonwealth Bank is scheduled to take full ownership of Aussie Home Loans by late August.

No intent behind alleged breaches: CBA

The Commonwealth Bank “has no reason to believe” there was any intent or commercial incentive behind its alleged breaches of anti-money laundering and counter-terrorism financing laws.

“The board notes that it has no reason to believe that the allegations arose from deliberate or unethical behaviour, or any commercial motive,” CBA chairman Catherine Livingstone said on Wednesday.

CBA has already said a coding error was behind the bank’s alleged failure to provide on-time reports for more than 53,500 cash transactions of $10,000 or more through its Intelligent Deposit Machines between November 2012 and September 2015.

– ABC with AAP

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