Westpac Bank chief resigns over $7 billion money-laundering scandal

Westpac CEO steps down over money-laundering scandal

Westpac CEO Brian Hartzer to step down

The bank is facing a potentially massive fine over claims that it failed to report millions of worldwide fund transfers, including "high-risk transactions" to Southeast Asian nations potentially linked to child exploitation.

Westpac Bank chief executive Brian Hartzer resigned following charges that the Australian bank engaged in money-laundering.

He's the third high government from the nation's 4 main banks to depart prior to now 18 months amid the scandal-plagued Australian banking sector.

"It became clear that Board and management changes were in the best interest of the Bank", he said.

Brian Hartzer will leave the bank as of December 2, Westpac's Board announced in a statement. King introduced his retirement in September, however will stay till the appointment of a everlasting substitute.

Maxsted, who has been on the Westpac board since 2008 and chairman since 2011, said he would "bring forward his retirement as chairman to the first half of 2020".

The bank is suspected of failing to report 19.5 million worldwide fund transfers worth more than US$7 billion from November 2013 to September previous year.

In belief, Westpac might per chance well per chance additionally face a exquisite up to 483 trillion Australian dollars (US $330 trillion).

But in its submission to the Federal Court, Austrac noted that each of the 23 million breaches it said Westpac had committed can carry a civil penalty of A$17-21 million.

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"These alleged breaches are of the most serious nature, and there needed to be accountability", Treasurer Josh Frydenberg told reporters in Canberra.

"I think it's welcome, I think it's appropriate", he told Sky News, adding that the allegations levelled against Westpac were "disappointing, shocking, and unacceptable".

"I think it's necessary and it follows the strongest, clearest comments from the Prime Minister and the Treasurer about community expectations, government expectations in the face of what is a serious and profound breach".

But his departure was announced after The Australian newspaper reported that he told executives the public "was not overly concerned" with the scandal and urged staff to focus on selling more mortgages and improving customer service. Last year Commonwealth Bank, the owner of ASB, paid $A700 million to settle similar law breaches.

Australian Prime Minister Scott Morrison had called on the bank to consider the CEO's future last week after the country's financial crime agency, AUSTRAC, made the allegations in a lawsuit against Westpac.

The swift turnaround by United States born Brian Hartzer underscored how politically and publicly sensitive missteps by Australia's big banks have become in the wake of a bruising public inquiry that found rampant profiteering in the industry.

The CBA ended up negotiating an A$700 million settlement.

The scandal is likely to be front and center at Westpac's annual general meeting, scheduled for December 12., although Hartzer's exit might dampen some of the fireworks.

The financial institution's share costs had been up greater than 1% on Tuesday, having slumped eight% over the earlier 4 buying and selling days within the wake of the revelations.

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