Treasurer Josh Frydenbery held a doorstop interview to discuss the earlier announcement from Westpac Group Chairman Lindsay Maxsted that Group Chief Executive Officer (CEO), Brian Hartzer will be stepping down as CEO with current Chief Financial Officer (CFO), Peter King taking over as acting CEO, effective Monday 2 December.
In addition to the executive changes, Mr Maxsted also announced that long-standing Director, Ewen Crouch has decided he will not seek re-election at the upcoming Westpac AGM. Mr Maxsted has also confirmed he will bring forward his retirement as Chairman to the first half of 2020.
This will enable an incoming Chairman and the Board to oversee the appointment of a permanent CEO.
“The Board accepts the gravity of the issues raised by AUSTRAC,” Mr Maxsted said.
The Treasurer made an opening statement before taking questions from the media.
Frydenberg said, “the Government welcomes the announcement by Westpac of the immediate departure of their CEO and the decision to bring forward the departure of their Chairman. As I said over the weekend, these issues develop a momentum of their own but there needed to be accountability. The alleged breaches that have been levelled at Westpac are very serious, both in terms of the number of those alleged breaches but also the nature of them; 23 million alleged breaches of our anti-money laundering laws. AUSTRAC has said that there was a (inaudible) indifference by senior management, a lack of appropriate oversight by the board and a systemic failure by the bank. As you’re aware, both APRA and ASIC in addition to AUSTRAC, are conducting their own enquiries.
APRA is doing that under the Banking Executive Accountability Regime that the Coalition introduced and that took effect in 2018. Together with the BEAR, the Banking Executive Accountability Regime, we’ve also increased both the civil and criminal penalties for misconduct in the financial sector. We’re boosted the resources of our regulators, we’re putting in place a criminal division of the Federal Court and we’re taking action on all seventy-six recommendations of the Royal Commission. This week I will be introducing two pieces of legislation which will implement more of those Royal Commission recommendations.”
The Treasurer was asked if he thought the structural integrity of Westpac would be affected by the changes.
“I don’t think it will compromise Westpac’s ability to continue to be an important financial service provider in this country. Let’s not forget, its Australia’s oldest bank. Let’s not forget that millions of Australians have transactions with Westpac and rely on them to be holding their savings or be providing them with loans to grow their business. These are going to be pretty difficult days, not just for the board and for the management of Westpac, but no doubt for its thousands of employees across the company. But it will get through it and will continue to play a vitally important role in our economy.” he said.
View more photos from this interview at photos.keatingmedia.com.au