CBA’s operational risk capital add-on reduced by $500m
Commonwealth Bank of Australia’s $1 billion operational risk capital add-on has been reduced by $500 million by the Australian Prudential Regulation Authority (APRA) after the authority found the bank had made significant progress in implementing its remedial action plan.
The operational risk capital was part of the enforceable undertaking following APRA’s Final Report of the Prudential Inquiry into a series of incidents that damaged the bank’s public standing and was imposed in May 2018.
APRA said the latest quarterly report from the independent reviewer indicated the bank had made “significant progress” in executing its remedial action plan in areas such as risk management and compliance, remuneration and risk culture. However, it noted a substantial body of work was needed to ensure the improvements were fully embedded across the whole CBA group.
The add-on reduction was effective immediately and the remaining $500 million would remain until the bank finalised all of the matters covered by the remedial action plan, addressed all the final report recommendations, and APRA understood further validation work to assess the sustainability of its improvements in governance, accountability, and risk culture frameworks, practices and outcomes.
Commenting, CBA chief executive, Matt Comyn said: “We welcome APRA’s acknowledgement of the progress we have made over the past two years. At the same time, we and APRA recognise there is still a substantial amount of work to do before our remedial action plan is fully implemented and embedded across CBA.
“We remain committed to achieving these outcomes and to ensuring the improvements to strengthen governance, accountability, and risk culture frameworks, practices and outcomes are sustained.”
The bank said its next update on its remedial action plan would be provided in February 2021.
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
