Australian Transaction Reports and Analysis Centre opens AML/CTF enforcement investigation into Bendigo and Adelaide Bank as APRA orders root cause review and AUD 50 million capital add on

The Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Prudential Regulation Authority (APRA) announced coordinated action to address weaknesses in Bendigo and Adelaide Bank’s money laundering risk management and broader non-financial risk management practices and risk culture. AUSTRAC has commenced an enforcement investigation into whether the bank has complied with obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, alongside APRA measures requiring a root cause analysis and an AUD 50 million operational risk capital add-on. The actions follow an independent Deloitte review into suspected money laundering at a Bendigo Bank branch that the bank reported to AUSTRAC, which found significant deficiencies in identifying, mitigating and managing money laundering and terrorism financing risk. APRA stated it is concerned the weaknesses may apply more broadly across the bank’s operations, and AUSTRAC noted the investigation follows supervisory engagement and the bank’s disclosure of deficiencies. APRA’s capital add-on will remain in place until remedial measures are completed and wider concerns are addressed to APRA’s satisfaction, and both agencies noted that further action remains possible.