Australian Transaction Reports and Analysis Centre and APRA take coordinated action on Bendigo and Adelaide Bank including an AML CTF enforcement investigation and an AUD 50 million capital add on

The Australian Transaction Reports and Analysis Centre (AUSTRAC) and APRA have announced coordinated measures to address weaknesses in Bendigo and Adelaide Bank’s money laundering risk management, broader non-financial risk management practices and risk culture. AUSTRAC has commenced an enforcement investigation into whether the bank has complied with its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The actions follow an independent Deloitte review into suspected money laundering at a Bendigo Bank branch, which the bank reported to AUSTRAC, that identified significant deficiencies in the bank’s identification, mitigation and management of money laundering and terrorism financing risk. APRA will require the bank to conduct a root cause analysis extending beyond money laundering and terrorism financing, and to hold an operational risk capital add-on of AUD 50 million until remedial measures are completed and wider concerns are addressed to APRA’s satisfaction. AUSTRAC’s investigation will examine compliance with the AML/CTF Act and inform any further AUSTRAC action, and both agencies noted the measures do not preclude additional future action.