Westpac CEO Steps Down

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The CEO of Westpac has fallen on his sword over the latest scandal rocking the bank.

Given the circumstances, it was hardly a surprise.

The company announced Tuesday that CEO Brian Hartzer will step down in the wake of allegations that the bank had violated money laundering and terrorism financing regulations tens of millions of times.

"As CEO, I accept that I am ultimately accountable for everything that happens at the bank", Hartzer stated in an announcement.

Shadow Treasurer Jim Chalmers said the behaviour of Westpac under Mr Hartzer was "nothing short of disgraceful" and there had been "a failure of leadership".

Not a bad outcome considering the circumstances and at the very least Mr Hartzer will be forgoing his 'FY19 'Short-Term Variable Reward'.

That could potentially saddle Westpac with a fine that far surpasses the 700 million Australian dollars ($474 million) levied past year on Commonwealth Bank of Australia after that bank admitted it failed to observe laws to prevent money laundering and financing of terrorism.

Hartzer will be replaced by Westpac's current CFO, Peter King, as of December 2.

The financial institution's chief government, Ian Narev, then retired, whereas Nationwide Australia Financial institution chief government officer Andrew Thorburn and chairman Ken Henry left after the royal fee.

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Maxsted said in the statement that the board accepted "the gravity of the issues raised by AUSTRAC".

"As used to be acceptable, we sought feedback from our stakeholders, including shareholders, and having carried out so it was wonderful that board and administration changes had been in basically the most wonderful ardour of the bank", Maxsted mentioned. "But actually for people in mainstream Australia going about their daily lives, this is not a major issue, so we don't need to overcook this", the CEO had said, according to the paper.

The financial institution is suspected of failing to report 19.5 million worldwide fund transfers valued at greater than United States $ 7 billion between November 2013 and September 2018.

In theory, Westpac could face a fine up to 483 trillion Australian dollars (US $330 trillion).

The Australian Transaction Reports and Analysis Centre says Westpac didn't keep proper records or have sufficient knowledge of where the money was flowing.

"I had conversations with Westpac and these discussions were constructive", he added. King said he would stay "as long as the board needs me". Westpac's competitor Commonwealth Bank paid a A$700m fine for similar breaches a year ago. It negotiated a 700 million Australian greenback settlement.

Mr Hartzer is the third chief executive among Australia's "big four" banks to depart since the royal commission began in 2018.

Westpac's shares rose 1.8 percent by Tuesday afternoon, having slumped 8 percent over the previous four trading days since the regulator announced its lawsuit, wiping A$7.5 billion off the bank's market capitalization.

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.

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