CBA (ASX:CBA) share price in focus after APRA Remedial Action Plan update

The Commonwealth Bank of Australia (ASX:CBA) share price could be on the move today after a positive update on its APRA Remedial Action Plan…

| More on:
CBA share price represented by branch welcome sign

Image Source: Commonwealth Bank

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Commonwealth Bank of Australia (ASX: CBA) share price will be on watch today after the release of a positive update this morning.

What did CBA announce?

This morning Australia's largest bank revealed that APRA has completed the review into the progress it has made against the Prudential Inquiry Remedial Action Plan and made a decision in relation to the bank's operational risk capital as part of the Enforceable Undertaking.

According to the release, APRA's validation review found that Commonwealth Bank has made significant progress in implementing its Remedial Action Plan.

As a result, the operational risk overlay imposed on the bank has now been reduced from $1 billion to $500 million with immediate effect.

Management notes that this reduction represents an increase in Common Equity Tier 1 capital of 17 basis points.

Commonwealth Bank's Chief Executive Officer, Matt Comyn, said: "We welcome APRA's acknowledgment of the progress we have made over the past two years. At the same time, we and APRA recognise there is still a substantial amount of work to do before our Remedial Action Plan is fully implemented and embedded across CBA."

"We remain committed to achieving these outcomes and to ensuring the improvements to strengthen governance, accountability and risk culture frameworks, practices and outcomes are sustained," he added.

What was the Remedial Action Plan?

In June 2018 the bank revealed its Remedial Action Plan which outlined the steps its board and senior leaders will take to respond to the Prudential Inquiry's 35 recommendations.

This followed an inquiry which identified a number of shortcomings in the bank's governance, culture, and accountability frameworks, particularly in dealing with non-financial risks. This includes a shortcoming related to Anti-Money Laundering and Counter-Terrorism Financing (AML-CTF) matters.

Commonwealth Bank intends to provide its next update on its progress in February 2021.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »