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AMP CEO resigns over bank misconduct revelations

Australian Prime Minister Malcolm Turnbull's government is expected to announce harsh new criminal and financial penalties for bank misconduct
AFP

Sydney (AFP) – The CEO of Australian bank AMP resigned suddenly on Friday after revelations of widespread abuses by the financial company, including charging thousands of customers for services never received.

Following several days of damaging testimony by AMP executives before a Royal Commission set up in February to investigate misconduct in the banking industry, AMP announced that CEO Craig Meller was stepping down “with immediate effect”.

“AMP apologises unreservedly for the misconduct and failures in regulatory disclosures in the advice business,” the bank’s chairman, Catherine Brenner, said in a statement released early Friday.

In addition to charging clients for non-existent services, AMP admitted to the commission this week that senior executives had intervened in the drafting of a supposedly independent report drawn up for the inquiry.

It also admitted misleading the stock market watchdog Australian Securities and Investment Commission (ASIC) about the scandal, which affected some 15,700 clients between 2009 and 2016.

In its statement, AMP said a non-executive member of the bank’s board, Mike Wilkins, had been appointed acting CEO and that an independent expert would head “an immediate, comprehensive review of AMP’s regulatory reporting and governance processes”. 

AMP is just one of several major Australian banks under scrutiny by the Royal Commission. 

Hearings this week also revealed that a subsidiary of CBA, the country’s biggest bank, had continued charging service fees to some customers years after they had died.

The conservative government of Prime Minister Malcolm Turnbull, which had long resisted launching the Royal Commission, was set to announce later Friday harsh new criminal and financial penalties for bank misconduct.

The country’s major banks — among the developed world’s wealthiest — had been under increasing scrutiny in recent years amid allegations of dodgy financial and life insurance advice and mortgage fraud.

There have also been claims of anti-money laundering laws being breached and benchmark interest rates rigged.

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