The review, commissioned by the newly appointed Westpac Board Financial Crime Committee, would commence immediately.

“Westpac is determined to urgently address the issues that have given rise to the AUSTRAC statement of claim,” Mr Maxsted said.

“We are genuinely remorseful for any hurt caused by the shortcomings in our systems and processes and understand we need to find the root causes and ensure accountability.”

Mr Maxsted said the newly appointed Committee that would oversee the review on behalf of the Board of Westpac, is chaired by Non-Executive Director Peter Nash and includes other non-executive Directors, Nerida Caesar, Steven Harker and Margaret Seale.

“I am pleased Promontory has agreed to undertake this urgent external review given their background and global expertise on this matter,” Mr Maxsted said.

“They will be provided all the resources they need to ensure a thorough, rapid and independent analysis is undertaken.”

Mr Maxsted said the first priority would be reviewing issues associated with LitePay.

“If and where procedural, escalation or accountability failings are confirmed through Promontory’s review, there will be immediate action taken.”

Commenting on their appointment, Promontory Australasian Practice Leader, Jeff Carmichael said, “I am pleased to have been asked to undertake this important review.

“With the rapid digitisation of the global economy, the proliferation of financial crime has increased exponentially,” Dr Carmichael said.

“Governments and financial institutions all around the world are grappling with the complexities associated with both monitoring and managing the reporting of suspicious activity given the huge volumes of transactions taking place every day.

“As we have seen with the Westpac matter, the implications of systems, personnel or governance failings around financial crime can be very serious.”

In addition to Promontory’s appointment, Westpac will also establish an Accountability Review advisory panel of three independent experts to consider Promontory’s report and provide recommendations on governance as well as Board accountability. The makeup of the panel will be confirmed in coming days.

The recommendations of the reviews will be made public and implemented as soon as possible.

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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.

Current Chief Operating Officer, Gary Thursby will act as CFO.

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.

“As was appropriate, we sought feedback from all our stakeholders including shareholders and having done so it became clear that Board and management changes were in the best interest of the Bank.

“Peter King has been appointed Acting CEO until a global search process for a new CEO is completed.

“Peter has had a long and distinguished career at Westpac and has been the CFO since 2014. He is the right choice to provide stability and direction to the Bank and its people.

“He is an executive of exceptional integrity who is deeply respected by the market and the entire Westpac team.

“The Board has asked Peter to focus on two immediate priorities: to implement the Westpac Response Plan and to continue to execute the Group’s broader strategy.

“We are determined to urgently fix these issues and lift our standards to ensure our anti-money laundering and other financial crime prevention processes are industry leading.

“We are currently working through our response to the Statement of Claim and will shortly commence the independent review. The Board will continue to provide updates on these issues.”

Mr Maxsted thanked Mr Hartzer for his service.

“Brian leaves the Bank with a strong balance sheet, with each of our businesses number one or two in their markets.”

Mr Hartzer said: “As CEO I accept that I am ultimately accountable for everything that happens at the Bank. And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves.”

Mr Maxsted said he would also like to acknowledge and thank Ewen for his integrity and substantial contribution during his six and half years as a Director of Westpac.

“Ewen’s extensive legal experience and commercial knowledge has been invaluable to the Board.”

Peter King said: “I am honoured to be appointed to this role. I understand the responsibility of this position and the importance of Westpac both as an institution and Australia’s oldest bank. I am committed to helping address the current issues and restore the reputation of the bank.” For further information: David Lording Andrew Bowden

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