Yahoo Finance Westpac fined record £722m for breaching money laundering laws 23m times
Australia's Westpac bank has agreed to pay a record fine of A$1.3bn (£722m) for more than 23 million breaches of money-laundering laws, the bank and regulators announced on Thursday.
"I would like to apologise sincerely for the bank's failings," Peter King, Westpac's chief executive, said in announcing the fine, the largest civil penalty in Australian history.
The fine, agreed between Westpac and Austrac, Australia's financial intelligence watchdog, must be approved by a federal court.
Austrac said the proposed fine "reflects the seriousness and magnitude of compliance failings by Westpac", one of the country's biggest banks.
The fine exceeded the provision of £500m Westpac budgeted earlier this year to cover the expected penalty.
The regulator accused Westpac in November 2019 of wholesale breaches of money-laundering and counter-terrorism regulations 23m times, involving more than £5.5bn in funds.
Among the most damaging allegations against Westpac, the regulator accused bank executives of "indifference" to evidence that some international transfers were being used to fund child exploitation.
Austrac said the bank had been aware of heightened risks associated with frequent small payments destined for Southeast Asia since 2013 and had been "specifically briefed" on the risks with respect to one of its money transfer channels in June 2016.
Westpac's chief executive, Brian Hartzer, subsequently resigned over the scandal, handing over to Mr King, the bank's chief financial officer at the time.
The company chairman, Lindsay Maxsted, also stepped down.
Mr King on Thursday said Westpac had beefed up its financial crime monitoring capabilities and undertaken a "reassessment of our culture, governance and accountability" to prevent future breaches.
"We are determined to continually lift our financial crime standards, comply with our obligations and uphold our customer, community and regulatory expectations," he said in a statement.
Australia's largest lender, the Commonwealth Bank, paid a fine of £388m in 2018 after Austrac found it had failed to report on 53,500 transactions.
Australia's banking industry, one of the world's most profitable, is facing an array of challenges.
The country's four biggest banks - Commonwealth, Westpac, National Australia Bank and ANZ - were the target of a royal commission that in 2019 exposed rampant malpractice across the sector.
It found banks had charged fees to dead people and to others for no services at all, used aggressive sales tactics and provided poor advice that led to significant financial upheaval for clients.
All the banks have reported significant hits to profits as they reimburse hundreds of millions of dollars to wronged customers.
