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APRA launches investigation into big 4 bank
The prudential regulator has formally commenced an investigation into possible breaches of the Banking Act 1959 against a big four bank.
APRA launches investigation into big 4 bank
The prudential regulator has formally commenced an investigation into possible breaches of the Banking Act 1959 against a big four bank.
Westpac is facing allegations against its directors and/or its senior managers breaching the Banking Act – including the Banking Executive Accountability Regime (BEAR) – or contravened APRA’s prudential standards.
APRA will focus its investigation on the alleged matters identified by AUSTRAC (as Westpac took actions to rectify and remediate the issue once it was discovered).
The prudential regulator has imposed a $500 million capital requirement on the bank “to reflect heightened operational risk profile of the bank”.
APRA has now asked the bank to add an additional $1 billion, following a statement in July.
The regulators have also initiated an extensive review program focused on Westpac’s risk governance. “The review program will include risk management, accountability, remuneration and culture.”
APRA deputy chair John Lonsdale said: “AUSTRAC’s statement of claim in relation to Westpac contains serious allegations that question the prudential standing of Australia’s second-largest bank.”
The investigation offers APRA the opportunity to exercise legal powers that have been expanded and strengthened since 2017’s CBA Prudential Inquiry, including enhanced investigative powers and the implementation of the BEAR in 2018.
In a statement to the Australian stock exchange, Westpac group chairman Lindsay Maxsted said: “Westpac accepts the gravity of the issues presented by AUSTRAC.
“As previously stated, these shortcomings are unacceptable, and we are determined to urgently fix these issues and lift our standards.”
Following the allegations against Australia’s second-largest bank, its share price fell by 0.644 per cent to 24.690 shortly after the announcement.
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