Commonwealth Bank of Australia [ASX:CBA] share price has dropped by 1.5%. At time of writing, shares are trading at $69.23, down from $70.45 from yesterday.
The drop in share value came after the nation’s biggest lender announced that they have entered into an agreement with AUSTRAC, the Australian Government’s financial intelligence agency, to resolve the anti-money laundering charges against them.
Why has Commonwealth Bank’s share price dropped?
The agreement with AUSTRAC states that Commonwealth has agreed to pay $700 million, plus legal fees equivalent to $2.5 million.
Commonwealth’s Chief Executive Officer, Matt Comyn has said that the bank is committed to improving its processes, systems and policies to ensure such a problem does not occur again.
‘This agreement, while it still needs to be approved by the Federal Court, brings certainty to one of the most significant issues we have faced.
‘While not deliberate, we fully appreciate the seriousness of the mistakes we made. Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologise to the community for letting them down’.
What can we expect to see next from Commonwealth Bank?
Commonwealth will acknowledge a $700 million requirement in its financial statements for the full year, ending in June 2018. However, they have already accounted for $375 million in their most recent half-year results.
The bank has a long way to go in restoring public trust, but it seems they are in it for the long haul.
For Markets and Money
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