Australia's Troubled Westpac Names Ex-Barclays Chief As New Chairman

Westpac appointed former Barclays chief executive John McFarlane as its new chairman Thursday, as the Australian banking giant deals with a massive money laundering scandal

Sydney, (UrduPoint / Pakistan Point News - 23rd Jan, 2020 ):Westpac appointed former Barclays chief executive John McFarlane as its new chairman Thursday, as the Australian banking giant deals with a massive money laundering scandal.

McFarlane, also formerly the chief of the Australia and New Zealand Banking Group (ANZ), will take office in April and immediately oversee the search for a new CEO to replace Brian Hartzer, who resigned after the money-laundering scandal surfaced in November, the company said.

Australia's financial intelligence agency AUSTRAC has accused Westpac of committing 23 million breaches of money laundering and counterterrorism rules in "serious and systemic" law-breaking involving more than US $ 7 billion.

AUSTRAC notably alleged that Westpac executives turned a blind eye to numerous "high-risk transactions" to Southeast Asian nations suspected to be linked to child exploitation.

The scandal, expected to result in massive fines against Westpac, also forced board chairman Lindsay Maxsted to bring forward his retirement, opening the way for McFarlane's appointment.

A 27-year banking veteran, McFarlane has held executive and board positions with financial institutions and associations in the UK, Australia and New Zealand, including 10 years as CEO of ANZ.

"This experience, coupled with his strong customer and employee focus, will be invaluable to Westpac as the organisation executes its strategy and implements its response plan" to the AUSTRAC charges, Maxsted said in a statement.

"I'm excited by the challenge of returning Westpac to its place as a leading global bank, following recent events," the British-born McFarlane, 72, said.

"To some extent, the internal and external challenges ahead for Westpac are not dissimilar to those in my last five financial institutions," he said.

"Nevertheless, I'm sufficiently battle-hardened to realise things can be tougher than you think and that in banking, nothing is ever certain," he added.

Australia's banking industry, one of the world's most profitable, is facing an array of challenges.

The country's four biggest banks -- CBA, Westpac, National Australia Bank (NAB) and ANZ -- were the target of a royal commission that earlier this year 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.

Australia's largest lender, the Commonwealth Bank (CBA), was found by AUSTRAC in 2018 to have committed widespread breaches of money-laundering rules.

But the breaches concerned 53,500 transactions -- a small fraction of those alleged against Westpac.

CBA ended up negotiating an Aus$700 million settlement, indicating Westpac faces far higher penalties.