“Still work to do” as APRA cuts CBA’s capital penalty
The prudential regulator has reduced the $1 billion capital penalty it charged the Commonwealth Bank two years by $500 million as it recognsied good progress made on the bank’s remediation plan.
In 2018, APRA charged the bank a $1 billion ‘capital add-on’ as part of its response to the Final Report of the Prudential Inquiry into the Commonwealth Bank of Australia for a series of governance failures.
The Inquiry, which followed a series of incidents that damaged the bank’s public standing, concluded that “CBA’s continued financial success dulled the senses of the institution", particularly in relation to the management of non-financial risks.
The latest quarterly report from the its independent reviewer found that the bank has made significant progress in executing a number of reforms under the remedial plan including in the areas of risk management, compliance, remuneration and risk culture.
“We welcome APRA’s acknowledgment of the progress we have made over the past two years,” CBA CEO Matt Comyn said.
“At the same time, we and APRA recognize there is still a substantial amount of work to do before our Remedial Action Plan is fully implemented and embedded across CBA,” he said.
“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.”