The CBA has satisfied the obligations of enforceable undertaking of prudential investigation

The Commonwealth Bank of Australia (CBA) acknowledges APRA’s announcement regarding the prudential investigation.

Following CBA’s compliance with its obligations under the Enforceable Undertaking (EU), the remaining operational risk capital surplus of $500 million imposed on CBA is released effective September 30, 2022. This represents an increase Common Equity Tier 1 capital of 15 basis points.

Commonwealth Bank Chief Executive Matt Comyn said: “We are committed to ensuring that the improvements we have made to our governance, culture and risk management practices are continuously improved and sustained.

The release of Operational Risk Capital follows the completion of the CBA’s Corrective Action Plan (RAP) in September 2021, further validation work undertaken by APRA and satisfactory final assessments by the examiner independent.

Important Information

  • On April 30, 2018, Commonwealth Bank of Australia entered into an enforceable undertaking (EU) with APRA. On May 1, 2018, the APRA published its final report of the CBA’s prudential investigation.
  • On June 29, 2018, the CBA RAP was approved by APRA.
  • On November 20, 2020, APRA reduced the operational risk capital imposed on the CBA from $1 billion to $500 million in response to significant progress. The ABC completed its corrective action plan on September 30, 2021.
  • Following further validation work and satisfactory final evaluations, the remaining $500 million in operational risk capital is released.
  • The independent reviewer said:
    • There is now clear and committed leadership at the highest level in the management of non-financial risks.
    • The evolution of the ABC’s thinking about client outcomes has been nothing short of transformative.
    • There’s a much clearer and stronger focus on ensuring good results for clients and the “should we?” question has become part of the Group’s daily conversations.
    • Challenge is not only a constant feature of meetings and forums, it is welcome.

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