Commonwealth (ASX:CBA) completes remedial action plan under critical watch

Commonwealth Bank (ASX:CBA) have wrapped up its 13th and final report to improve its governance, culture and accountability across the bank.

From 2018, they committed to all recommendations in a Prudential Inquiry and implemented a “remedial action plan”. Commonwealth said this morning that all milestones have been “completed and effective” and all recommendations had been implemented. 

“Three years ago we committed to delivering all recommendations in the Prudential Inquiry final report. Completing the remedial action plan is a significant milestone but we recognise there is still much more for us to do. Our focus is to now demonstrate that the changes we’ve made are sustained and continuously improved,” said CEO Matt Comyn. 

Last November, the Australian Prudential Regulation Authority (APRA) reduced the operational risk overlay imposed on the bank from $1 billion to $500 million in response to its progress. In September this year, Commonwealth completed the remedial component, and said the focus is to now demonstrate that the changes made are sustained and continuously improved.

The work with APRA and remaining $500 million “operational risk” capital will remain in place during this time. APRA will undertake further validation work to assess the sustainability of Commonwealth’s improvements, while an Independent Reviewer will monitor their prudential work. 

Shares in Commonwealth Bank (ASX:CBA) are trading 0.03 per cent lower at $104.66.