Westpac has copped a $1.3 billion fine for its money laundering scandal – the largest in Australian corporate history

Westpac will be fined $1.3 billion as part of its AUSTRAC investigation.
Westpac will be fined $1.3 billion as part of its AUSTRAC investigation. (SMH, Will Willitts)
  • Westpac has agreed to pay $1.3 billion to settle the AUSTRAC investigation into the bank.
  • It comes after allegations emerged in November that it had violated anti-money and counter-terrorism financing laws 23 million times and failed to prevent child epxloitation payments in South-East Asia.
  • It exceeds both the $900 million the bank had put aside earlier this year and the $700 million fine the Commonwealth Bank copped back in 2018.
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Whether it’s money laundering or charging fees to the dead, corporate Australia has a sterling record of going above and beyond.

On Thursday, Australia’s second-largest retail bank Westpac did just that, claiming the largest fine racked up by an Australian company, agreeing to pay $1.3 billion.

It ends an AUSTRAC investigation that has been plaguing it since November and cost it CEO Brian Hartzer, and prompted long-standing chair Lindsay Maxsted to leave as well.

The allegations? Contravening the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF) as many as 23 million times, and for failing to stop payments associated with child exploitation.

“I would like to apologise sincerely for the bank’s failings,” CEO Peter King said in a statement.

“We are committed to fixing the issues to ensure that these mistakes do not happen again. This has been my number one priority. We have also closed down relevant products and reported all relevant historical transactions.”

To do so, King said the bank had recruited 200 financial crime personnel, overhauled its systems, and create a new executive position and board subcommittee for additional oversight.

Thursday’s fine dwarfs the $900 million the bank put aside in April as part of a $1 billion provisioning.

While greater than what Westpac anticipated, it will ultimately be paid by bank shareholders, rather than those actually responsible for the failings.

The penalty blows out of the water the previous record of $700 million held by the Commonwealth Bank for enabling criminals to move profits via its smart ATM system.

Who says there’s no competition in banking?