Commonwealth Bank head to retire amid money laundering claims

Ian Narev was facing calls to step down

The head of Australia's Commonwealth Bank will step down by the middle of next year, the firm has said.

Chief Executive Ian Narev will retire after six years at the helm of Australia's biggest mortgage lender.

It comes amid pressure from regulators over 53,700 alleged breaches of anti-money laundering laws.

The board said it brought forward details of its succession plans to end speculation over his tenure.

Mr Narev had faced calls to step down after the Australian Transaction Reports and Analysis Centre (Austrac) launched a civil action against the bank over what it described as "serious and systemic" breaches of anti-money laundering laws.

The bank's chairman Catherine Livingstone said in a statement on Monday that Mr Narev would leave the bank by the end of the 2018 financial year.

The bank's board also recently scrapped short-term bonuses for all senior executives this year in response to the allegations.

Deposit machines to blame

Most of the alleged breaches related to the bank's deposit machines, which could accept up to $20,000 Australian dollars (£12,160; $15,820) in cash at a time, anonymously if the person depositing was not a Commonwealth customer.

The bank failed to meet deadlines for reporting transactions over the legal threshold of A$10,000, according to Austrac.

Commonwealth Bank said the breaches were due to a coding error, which meant the machines failed to automatically report the transactions.

More investigations

Last week, Australia's corporate regulator said it would open a separate investigation into the bank's handling of money laundering suspicions.

The Australian Securities and Investment Commission said it would look at whether the bank's board complied with its obligations to tell shareholders about all potential liabilities.

Despite its ongoing legal tussles, last week the bank beat forecasts to report profits of A$9.88bn (£6bn; $7.8bn)

The figure was 4.6% higher than last year's results and the eighth straight year of record profits for the bank.