A second major Australian bank has flagged “weaknesses” in its money laundering controls, months after the financial intelligence agency took the country’s largest firm to court over alleged breaches of the law.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) filed a civil case against the nation’s biggest bank, the Commonwealth Bank of Australia (CBA), in August for alleged “serious and systemic non-compliance” over what it said were 50,000 instances of misconduct.
The case sparked renewed calls for a royal commission to investigate the big banks and led the Commonwealth Bank — the nation’s largest company by market capitalization — to announce that chief executive Ian Narev would retire next year.
The National Australia Bank (NAB) said in its annual report published on Tuesday that it was strengthening money laundering and counter-terrorism financing programs.
NAB added that it was “currently investigating and remediating a number of identified issues,” including “certain weaknesses” with the implementation of consumer identification requirements that affect transaction monitoring.
It warned that the “outcomes ... are uncertain.”
“It is possible that, as the work progresses, further issues might be identified and additional strengthening might be required,” the bank said.
NAB chief risk officer David Gall said the bank did not have compliance issues with AUSTRAC.
“We have anti-money laundering policies and processes in place, and if we find weaknesses in these, we work hard to strengthen and fix them immediately,” he said in a statement late on Wednesday.
In relation to the allegations raised in the AUSTRAC case, CBA is facing an open class action claiming that the bank neglected its disclosure obligations as a listed company and hurt shareholders who bought its stock.
Other Australian regulators also launched inquiries into CBA over its handling of the alleged breaches and its organizational culture.
The bank is accused of failing to deliver to AUSTRAC on time thousands of reports of cash transactions totaling A$624.7 million (US$474.11 million).
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