Westpac's anti-money laundering issues widen with more reporting failures
Further investigations into Westpac's breaches of anti-money laundering laws have revealed 175,000 transactions that it failed to report to the regulator, and a further 365,000 reports that may have included incomplete or inaccurate information.
The bank, which was thrown into turmoil last year by an anti-money laundering lawsuit, on Tuesday said reporting breaches that it had previously disclosed in May this year were in fact more numerous than it had estimated.
Westpac said breaches that it had previously disclosed in May this year were in fact more numerous than it had estimated.Credit:James Alcock
Westpac also announced on Tuesday it had hired Scott Collary, a senior executive from Bank of Montreal, as its chief operating officer, while group executive Gary Thursby would be resigning next year.
The fresh reporting failures come after Westpac this year admitted to 23 million breaches alleged by the financial intelligence agency AUSTRAC last year, including failures to properly vet suspicious transactions potentially linked to paedophilia. It has set aside $900 million to cover the penalty it could face as a result of the scandal, which unleashed a management shake-up in the country's oldest bank.
But with some parts of the case being contested, Westpac has not yet reached a settlement with the watchdog, which has in recent months been demanding more information and could lodge an updated statement of claim in the blockbuster case.
The latest reporting failures relate to threshold transaction reports (TTRs), which are reports that banks must lodge with the regulator, AUSTRAC, whenever they process a cash transaction of $10,000 or more.
Westpac on Tuesday said in response to a request from AUSTRAC, it had given the regulator updated information showing there were about 175,000 TTRs that it failed to make, and a further 365,000 TTRs that were lodged by may have contained incomplete or inaccurate information.
That compares with Westpac's estimate at its half-year results in May that there may have 60,000 to 90,000 TTRs that were not lodged with AUSTRAC.
The bank on Tuesday cautioned that not all of the reporting failures may have been breaches of the laws, and it was continuing to engage with AUSTRAC.
"A significant proportion of the potential reporting issues relate to a range of complex scenarios where the legislation requires Westpac to exercise judgement on how multiple transactions may be aggregated and whether a threshold transaction has actually occurred," the bank said in a statement to the ASX.
"As previously disclosed, Westpac has been notified by AUSTRAC that it may amend its statement of claim to include allegations arising from its investigations into these TTR issues."
As the bank goes through a period of change, it also announced another round of executive changes on Tuesday, with Mr Collary appointed to run its technology and operations teams.
Westpac said Mr Thursby, who has been acting as chief financial officer, had decided to leave after 13 years at the bank, including as chief strategy and operating officer, and running enterprise services.