Ian Narev
Commonwealth Bank CEO Ian Narev had been under pressure to step down over a money laundering scandal Reuters

Commonwealth Bank chief executive Ian Narev will step down by July next year amid a money laundering scandal at the lender.

Narev, 50, had been under pressure to quit after regulators accused the bank of not reporting more than 53,000 transactions that breached Australia's anti-money laundering laws.

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The Australian Transaction Reports and Analysis Centre (Austrac) launched civil proceedings against Commonwealth Bank earlier this month, potentially exposing Australia's largest bank to millions of dollars in fines.

The lender moved to cut short-term bonus payments for all senior executives last week in response to the growing scandal.

Chairman Catherine Livingstone said in a statement that the bank had decided to make the announcement over the change in leadership to provide certainty to the market.

"Ian Narev will retire by the end of the 2018 financial year, with the exact timing dependent on the outcome of an ongoing comprehensive internal and external search process," she stated.

"In discussions with Ian we have also agreed it is important for the business that we deal with the speculation and questions about his tenure."

Narev took over as chief executive of Commonwealth Bank in 2011, replacing Ralph Norris.

Livingstone said in a press conference that discussions over Narev's departure had been going on among the bank's board of directors before the money laundering allegations came to light.

"This has been the basis of ongoing conversations between myself and Ian and the board since I became chair and there were conversations before that as you would expect given the length of his tenure," she said.

"We have full confidence in Ian as CEO, and as I said, the ongoing CEO succession process is something which you would expect to be happening given Ian is at this point in his tenure."

Meanwhile, Australia's top corporate regulator ordered Commonwealth Bank to refund A$10m (£6m) to 65,000 customers who were wrongly sold consumer credit insurance.