The Commonwealth Bank and National Security
On Wednesday the Commonwealth Bank (CBA) announced a record after tax profit of $9.8 billion.
It also indicated that risky loans were now down to 1.75% of its loan book.
This highlights the fact that the business activity of one of Australia’s leading companies is on the up.
It was a boost to Australia’s industry super funds which are obliged to hold Commonwealth Bank shares and it confirmed that the bank’s management is good at making money.
It’s another question when it comes to social and fiscal responsibility.
Last week it was revealed that the Australian Transaction Reports and Analysis Centre (Austrac) had commenced legal proceedings against the bank that could potentially cost it $1 trillion in penalties, an amount equivalent to the next 100 years’ dividends.
In the circumstances the response of the senior management, led by CEO Ian Narev, seemed remarkably unconcerned.
It said that the 53,000 breaches of the Austrac regulations regarding foreign transactions were all down to a single software glitch so there was really nothing to be concerned about.
CBA chairwoman, Catherine Livingston, took a dimmer view of the affair and the threat to shareholder interests: she announced that the board and senior management would lose $16 million in short-term bonuses as punishment for their negligence.
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