Westpac Pays Record A$1.3 Billion to Settle Laundering Suit

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Westpac Banking Corp. will pay a record A$1.3 billion ($920 million) fine to settle Australia’s biggest breach of anti-money laundering laws.

The fine, the largest levied against an Australian company, is more than the A$900 million Westpac had set aside for a potential penalty, and tops theA$700 million rival Commonwealth Bank of Australia paid to settle its breaches in 2018.

The settlement brings to an end an almost yearlong saga for Australia’s second-biggest bank, after it wasaccused of more than 23 million breaches of money-laundering laws, including failing to detect payments linked to child abuse. The fallout led to the departure of then Chief Executive Officer Brian Hartzer and the early retirement of Chairman Lindsay Maxsted.

As part of the settlement announced Thursday, Westpac admitted tofurther contraventions, which contributed to the agreed penalty, it said in a statement. The fine isequal to the Sydney-based bank’s first-half profit. It will take a further A$404 million provision to account for the higher penalty.

A probecommissioned by the bank found the risk culture around anti-money laundering and terrorism financing laws was “immature and reactive” and staff lacked the skills, expertise and experience to effectively manage that risk.

Peter King, who was appointed CEO to repair the bank’s tattered reputation, again apologized for the failings. “We are committed to fixing the issues to ensure that these mistakes do not happen again,” he said in a statement Thursday. “This has been my number one priority. We have also closed down relevant products and reported all relevant historical transactions.”

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