National Australia Bank has hired former Austrac chief executive Paul Jevtovic who comes to the lender after spending the last four years fighting financial crime at HSBC in Hong Kong.
The appointment comes just as NAB faces allegations of “potentially serious and ongoing non-compliance” with anti-money laundering laws with Austrac launching a formal investigation into the bank.
Jevtovic resigned from Australia’s financial crime agency in 2017 to take up a position with HSBC where he was variously regional head of money-laundering reporting and head of financial crime.
It is understood that he will report to NAB’s chief risk officer Sean Dooley.
The appointment follows a release on Monday where the bank said has been told Austrac had identified serious concerns with NAB’s customer identification procedures, ongoing customer due diligence, and compliance with anti-money laundering and counter-terrorism financing laws.
NAB was advised that these concerns have been referred to the regulator’s enforcement team, which has initiated a formal investigation.
Broker forecasts exclude fine
In the letter, the financial crimes regulator also said it has not made any decision about whether enforcement action would be taken, adding that at this stage, it is not considering civil penalty proceedings and that this decision is “reflective of the work undertaken” by NAB.
That comment jibes with Morgan Stanley who said its forecasts do not include any civil penalty or fine. “In our view, Austrac’s concerns relating to NAB do not seem as significant as previous concerns relating to Commonwealth Bank or Westpac," the broker said in a client note.
“Austrac acknowledges NAB's $800 million investment since June 2017 to improve its financial crime risk capability."
CBA stumped up $700 million in 2018 after the bank was revealed to have breached anti-money laundering laws. Westpac was fined $1.3 billion for the same breach last year.