Westpac ‘unreservedly apologises’ for money laundering
SYDNEY: The board of Australia’s second largest bank yesterday apologised unreservedly for 23 million breaches of money laundering laws, but stood by management despite pressure from politicians to review its leadership.
Westpac Banking Corp said its board met to discuss allegations by financial crime watchdog Austrac that it ignored red flags for years, including payments between known child exploiters.
Chairman Lindsay Maxsted said the bank would hire unspecified independent experts to run an overhaul of its anti-money laundering systems, including a review of accountability.
The bank had also started discussions with community groups about further steps to fight child exploitation.
“The notion that any child has been hurt as a result of any failings by Westpac is deeply distressing and we are truly sorry. The board unreservedly apologises,” said Maxsted.
“Our Board, CEO, and management team are fully committed to fixing these issues and we are taking all steps necessary to close any remaining gaps and fix our policies and procedures so that this can never happen again.”
The scandal had triggered calls for the resignation of top executives and directors, including chief executive officer Brian Hartzer, and is likely to be a focus for the bank’s annual meeting next month.
Goldman Sachs earlier cut its one-year share price target for Westpac by a tenth, citing likely knock-on effects including fines, class actions, loss of customers and capital concerns.
“In all cases, banks underperform peers in the 12 months after the incident by an average of 18 per cent,” said the US investment bank.
The downgrade struck another blow to shareholders of Westpac, with shares falling a further 1.6 per cent yesterday, taking the total value of its losses to A$6.4 billion (RM17.94 billion) since the suit was announced.
The broader share market was slightly higher.