Source : Perth Now news
A leading regional bank has dodged the embarrassment of a first strike on executive pay after lapses in its financial crime and risks systems that will cost it millions to fix.
The remuneration report for Bendigo and Adelaide Bank was passed by the annual general meeting on Tuesday with 84.8 per cent of shares in support and 15.2 per cent against, well clear of the 75 per cent supermajority it needed to pass.
Financial crime agency AUSTRAC in December launched an investigation into whether the bank complied with its obligations on money laundering regulations.
The bank reported itself to regulators after a review by Deloitte found serious bank-wide shortcomings following suspicious activity at one branch that resulted in four arrests.
Banking regulator APRA also required the bank to hold an additional $50 million in operational risk capital, and the bank expects its rectification plan will cost it $70 million over three years.
Chief executive and managing director Richard Fennell told the meeting he was ultimately accountable for the bank’s deficiencies in managing non-financial risk and resolving them.
“My number one priority is to fix these issues,” he said.
“There is a great deal of work ahead of us.”
In response to the problems, the board cut the short-term bonuses for the bank’s core leadership team.
Mr Fennell lost $397,000 and four other executives lost between $258,000 and $321,000.
As a result, the chief executive made $1.75 million for 2025/26, down from $2.4 million the year before.
A number of additional awards are on hold for other key personnel while the bank conducts its own investigation, and none of the leadership received any raises in 2025/26, chairwoman Vicki Carter told the meeting.
Ms Carter said identification and management was fundamental to the bank’s business and its licence to operate and apologised for it not meeting expectations on the issue.
The lender reported on Monday that it made $112.7 million in cash earnings for the September quarter, up 18.5 per cent from its average earnings over the previous two quarters.
