Commonwealth Bank announces retirement of CEO

Catherine Livingstone

Catherine Livingstone

CBA's annual report revealed that Narev, who has led the bank since December 2011, took a 46 percent pay cut because of the "significant damage caused to the group's trust and reputation" in light of the lawsuit.

The 50-year-old initially insisted he would stay on but Livingstone said Monday that the bank wanted to end speculation over his future. It was comparatively a smaller amount than the $12.3 million he received a year earlier.

As the country's biggest lender is engulfed by allegations it breached anti-money laundering rules, Livingstone said Narev would retire by June 2018, subject to when it was able to find a replacement.

The bank's board said last week it had no reason to believe that anyone at the bank deliberately acted unethically, or to enrich themselves.

Commonwealth Bank has blamed numerous alleged breaches on a software coding error, but also acknowledged other mistakes were made.

The CBA announced an eighth straight record annual profit of $9.9 billion last week.

Livingstone told reporters the board had full confidence in Narev, and would be looking for someone with a strong moral compass and dedication to transparency to Succeed Narev.

CBA Chairwoman Catherine Livingstone said Narev's departure had nothing to do with the latest scandal, allegations by the financial intelligence agency that criminals and terror financiers laundered millions of dollars through CBA accounts. The bank reportedly handed out $8 million in total to the CEO and 11 executives.

The company is now subject to investigations by the Australian Transaction Reports and Analysis Centre, as well as the Australian Securities and Investments Commission, which is seeking to determine whether the bank satisfied disclosure requirements. In discussions with Ian we have also agreed it is important for the business that we deal with the speculation and questions about his tenure.

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