CommBank shares slide after money-laundering accusations rattle investors

Rattled investors wiped about A$4.5 billion ($3.6 billion) from the market value of Australia's No.1 lender Commonwealth Bank on Friday, following allegations of "serious and systemic" breaches of money-laundering rules.

The bank said on Friday it was reviewing the allegations made by the country's financial intelligence agency AUSTRAC and will file a statement of defence.

AUSTRAC said on Thursday it had launched civil penalty proceedings in the Federal Court against CommBank in the biggest such case of its kind and the first against a major bank.

If found guilty, CommBank could face fines of hundreds of millions of dollars. The maximum penalty for contravening the anti-money laundering and counter terrorism financing law is A$18 million per breach.

AUSTRAC has accused the bank of 53,700 breaches.

In response, CommBank shares tumbled 3.7 percent to a 1-1/2-month low of A$80.90 by Friday afternoon, their largest intraday drop in nearly three months.

"It's clear that the market has built risk in today, the sources of that risk are the possibility of sanctions, fines, flowing from this civil action," said Ric Spooner, Chief Market Strategist at stockbroker CMC Markets.

"Beyond that there's also the consideration of other things, reputational risk, political or risk of increased regulation, of the cost of doing business. These kind of things can be a significant diversion of management time as well," he said.

The fall in CommBank shares dragged the financial sector and the benchmark S&P/ASX 200 index 0.3 percent lower in afternoon trade.

Commonwealth Bank is due to report full-year results on Aug 9.