26 Nov 2019

Westpac Australia sacks chief executive over laundering scandal

12:16 pm on 26 November 2019

Australian banking giant Westpac has sacked its chief executive over the money laundering scandal which threatens to cost the bank hundreds of millions of dollars.

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Photo: AFP

It announced chief executive Brian Hartzer would leave the job next week, while another director would not seek re-appointment and the chair would bring forward his retirement.

The bank faces legal action from the Australian financial crime watchdog, AUSTRAC, over failures to comply with anti-money laundering and counter-terrorism financing laws on more than 23 million occasions.

"As CEO I accept that I am ultimately accountable for everything that happens at the bank. And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves," Mr Hartzer said.

Westpac potentially faces trillions of dollars of penalties for the breaches, but is likely to settle on an agreed sum with AUSTRAC. Last year Commonwealth Bank, the owner of ASB, paid $A700 million to settle similar law breaches.

"The board accepts the gravity of the issues raised by AUSTRAC ... we sought feedback from all our stakeholders including shareholders and having done so it became clear that board and management changes were in the best interest of the bank," chair Lindsay Maxsted said.

New Zealand banking regulators have been looking at whether Westpac's local branch is implicated in the scandal, although at this stage there is no evidence it is involved in any way.

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