CBA fined $100,000 over disclosure
(14 October 2009 – Australia) The Commonwealth Bank (CBA) today agreed to pay a A$100,000 penalty after the Australian Securities and Investments Commission (ASIC) issued an infringement notice in relation to the bank’s capital raising in December 2008.
The Federal Securities regulator, ASIC, announced last December that it intended to proceed with an investigation into whether CBA possibly breached disclosure requirements after it bungled an A$2 billion equity placement by failing to disclose an increase in bad debt levels, prior to the placement, to investors.
ASIC fined the Big Four bank A$100,000, indicating that it had failed to disclose the information.
CBA stated in a media release that they do not regard the payment as an admission of liability and that it cannot be regarded as a finding that the bank contravened the Corporations Act.
Ralph Norris, group chief executive officer, CBA, said that the bank was disappointed with ASIC’s decision to issue the infringement notice.
Mr Norris said that because the loan impairment expense is a single line item in the group’s profit and loss statement, it cannot be considered in isolation, Mr Norris said.
In the bank’s ASX announcement at the time, the bank was experiencing strong volume and revenue growth, so the bank viewed this to significantly offset the forecast increase in loan impairment expense, Mr Norris noted.
CBA also highlighted that the net impact on its overall profitability was not material.
CBA has and will continue to regularly review their continuous disclosure procedures and introduce improvements where appropriate, Mr Norris concluded.
ASIC fined the Big Four bank A$100,000, indicating that it had failed to disclose the information.
CBA stated in a media release that they do not regard the payment as an admission of liability and that it cannot be regarded as a finding that the bank contravened the Corporations Act.
Ralph Norris, group chief executive officer, CBA, said that the bank was disappointed with ASIC’s decision to issue the infringement notice.
Mr Norris said that because the loan impairment expense is a single line item in the group’s profit and loss statement, it cannot be considered in isolation, Mr Norris said.
In the bank’s ASX announcement at the time, the bank was experiencing strong volume and revenue growth, so the bank viewed this to significantly offset the forecast increase in loan impairment expense, Mr Norris noted.
CBA also highlighted that the net impact on its overall profitability was not material.
CBA has and will continue to regularly review their continuous disclosure procedures and introduce improvements where appropriate, Mr Norris concluded.
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