Re-post from main thread as Westpac is the NZ Government Bank
Westpac woes widen as ASIC probe confirmed
Westpac faces an ASIC probe, while up to $8.06 billion has been wiped from its market capitalisation since the bank was ensnared in a money laundering scandal.
Westpac faces a fresh investigation into its alleged money laundering and child exploitation scandal as the lender scrambles to salvage its reputation and stem a share price plunge that has now stretched into a fourth session.
Westpac has lost as much as $8.06 billion from is market capitalisation since financial crime watchdog AUSTRAC announced last week it was taking the bank to court over an alleged 23 million breaches of money laundering laws.
The alleged breaches, which included claims the bank facilitated payments linked with child trafficking and sex offences, prompted the nation's second largest lender to slash executive bonuses and shut down its international transfer platform LitePay as its management team faces increasing pressure.
And the heat was turned up another notch on Monday when the corporate watchdog ASIC confirmed it too would be examining the bank for potential legal breaches, believed to relate to the Corporations Act and whether directors breached their duties.
The Australian Prudential Regulation Authority will also be investigating the bank, while chairman Lindsay Maxsted is set to front key investors this week in a series of meetings that could decide his future, and that of chief executive Brian Hartzer.
Confirmation of ASIC's investigation comes after Westpac released a statement on Sunday outlining its response plan to AUSTRAC's legal action, with Mr Maxsted saying the bank was "determined to urgently fix (the) issues".
These new commitments - which include closing LitePay, lifting standards through priority screening, and investing in initiatives to reduce the human impact of financial crime - will incur an extra $80 million pre-tax expense in FY20.
"We accept that we have fallen short of both our own and regulators' standards and are determined to get all the facts and assess accountability," Mr Maxsted said in a statement.
"In the interim, the board has determined that either all or part of the grant of the 2019 Short Term Variable Reward will be withheld for the full Executive team and several members of the general management team subject to the assessment of accountability."
AUSTRAC's claims hammered Westpac's share price for three straight trading sessions at the end of the week - wiping as much as $6.78 billion from the bank's value by Friday's close.
Westpac shares hit a fresh 10-month low of $24.26 in early trade, representing $8.06 billion hit to its value since Tuesday's close.
Shares in the bank recovered somewhat after 15 minutes but were still 1.41 per cent lower at $24.42 by 1315 AEST, against a 0.38 per cent climb for the broader ASX/200.
https://www.news.com.au/finance/business/breaking-news/westpac-to-cut-executives-bonuses/news-story/5c23648769c79d27c14d245321d821de