Commonwealth Bank has turned down the chance to signal a fresh start at the scandal-hit lender, instead promoting insider Matt Comyn to “rebuild trust” as its new chief executive.
Australia’s largest bank, which had been looking for a new CEO since Ian Narev announced his retirement in August, interviewed candidates at home and abroad.
However, it opted for one of the executives who last year forfeited their short-term bonuses following allegations the bank contravened anti-money laundering and counter-terrorism laws.
Chairman Catherine Livingstone said Mr Comyn, the bank’s current retail banking chief, was best placed to maintain CBA’s strong financial performance.
He will take charge on April 9.
“In selecting the new CEO, the board considered, very carefully, which candidate would be best suited to manage the unique combination of the bank’s commercial and operational priorities,” Ms Livingstone said on Monday.
“Of immediate concern, the bank currently faces a range of reputational, regulatory and legal issues that have overshadowed what has otherwise been very strong progress and performance.”
Mr Narev led CBA to a series of record profits and boosted shareholder returns by more than 120 per cent in his six-year tenure.
But he decided to step down after AUSTRAC alleged the bank breached money-laundering and terrorism-financing laws by failing to provide on-time reports for more than 53,000 transactions.
Mr Narev backed Mr Comyn – who sat next to him when CBA appeared for its twice-yearly grilling by the House Economics Committee at Parliament House – to succeed.
“He is a person of integrity and openness,” Mr Narev said.
“I know he will enhance the best aspects of CBA, while making the changes needed.”
Mr Comyn, who has led CBA’s retail banking unit since 2012, said the lender’s size meant it had to be held to the highest standards.
“By virtue of the position CBA holds in the community we need to equally demonstrate the highest levels of integrity and operational standards to earn stronger levels of trust within the community and regulators,” Mr Comyn said.
“The last six months in particular have been very challenging and I am committed to working with the board, the executive team and our wonderful people to rebuild trust in the Commonwealth Bank.”
Ms Livingstone would not discuss AUSTRAC’s Federal Court case in detail but said Mr Comyn was not solely responsible for any failings in the retail unit.
“We regard this as an organisation-wide matter for which we all take collective responsibility,” Ms Livingstone said.
Mr Comyn, who at 42 will be the youngest chief executive at any of the big four banks, will receive fixed remuneration of $2.2 million and be eligible for another $2.2 million in short-term incentives – plus up to $3.96 million in long-term incentives.
That means he could be paid as much as $8.36 million in the 2019 financial year.
Mr Narev received $8.77 million in 2016 and $5.71 million in 2017, when the bank’s executives forfeited short-term bonuses over AUSTRAC’s allegations the bank failed to report suspicious transactions quickly enough.
Mr Comyn was paid $2.35 million in 2017 and was among those who lost their short-term bonuses.
CBA shares closed up 54 cents, or 0.69 per cent, at $79.19.