APRA launches Westpac investigation

Process expected to be extensive and lengthy given the nature and number of alleged violations

APRA launches Westpac investigation


By Madison Utley

APRA has formally commenced its investigation into Westpac’s alleged breaches of the Banking Act.

The regulator plans to focus on the conduct that led to the matters alleged last month by AUSTRAC, as well as examine the bank’s actions to rectify and remediate the issues after they were identified.

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.

“While Westpac is financially sound, there are potentially substantial gaps in risk governance that need to be closed.

“Given the nature of the matters raised by AUSTRAC, the number of alleged breaches and the period of time over which they occurred, this will necessarily be an extensive and potentially lengthy investigation.”

The scope of APRA’s investigation into Westpac includes consideration of whether: 

  • Westpac’s governance, control and risk management framework was adequate and appropriately implemented
  • Westpac’s accountability and remuneration arrangements were adequate and appropriately implemented to effectively manage non-financial risks
  • There has been a failure to comply with accountability obligations under the Banking Executive Accountability Regime (BEAR)
  • There was a failure to promptly notify APRA of any significant breaches and/or a breach of accountability obligations

APRA will conduct its investigation concurrently with the investigation by ASIC, as well as AUSTRAC’s legal proceedings – with each agency cooperating where appropriate.

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