The National Australia Bank Ltd (ASX: NAB) share price is down this morning on news that AUSTRAC has some serious concerns.
What’s happening with the NAB share price?
The NAB share price is down more than 2% this morning after being informed by AUSTRAC that it has identified serious concerns with NAB’s compliance with the anti-money laundering and counter-terrorism financing (AML and CTF).
AUSTRAC told NAB in a letter that it’s the regulator’s view that there is “potential serious and ongoing non-compliance” with customer identification procedures, ongoing customer due diligence and compliance with NAB’s AML/CTF program.
These concerns have been referred to AUSTRAC’s enforcement team, which has initiated a formal enforcement investigation.
In the letter to NAB, AUSTRAC said that it hasn’t made a decision about whether or not an enforcement action would be taken.
AUSTRAC also said, at this stage, it is not considering civil penalty proceedings and that this decision is reflective of the work undertaken by NAB to date.
The regulator’s referral to its enforcement team follows regular engagement by NAB with AUSTRAC over a long period of time, both to report issues and keep AUSTRAC informed of progress in uplifting and strengthening the group’s AML/CTF program.
NAB noted that AUSTRAC has a wide range of enforcement options available to it, including civil penalty orders, enforceable undertakings, infringement notices and remedial directions.
Management comments
NAB CEO Ross McEwan said the big bank would continue to cooperate with AUSTRAC’s investigations:
“NAB takes its financial crime obligations seriously. We are very aware that we need to further improve our performance in relation to these matters. We have been working to improve and clearly have more to do.
“NAB has an important role in monitoring and reporting suspicious activity and keeping Australia’s financial system, our bank and our customers safe.
“It is a key priority for everyone at NAB to uplift our financial crime capabilities, minimise risk to customers and the bank, and improve operational performance. That’s why we are so focused on getting the basics right every time to protect our customers and our bank.”
Summary thoughts about NAB and the share price
At the moment, NAB doesn’t appear to be in that much trouble because AUSTRAC said it’s not looking at a civil penalty. But that could change.
Banks seem to be in regular trouble with regulators. It’s one of the reasons why I’m not a big fan of investing in banks like NAB.
