Australia has not just been beset by devastating fires, it has also suffered a series of blows to its banking industry, some of which are self-induced. Westpac has been accused of failings over money laundering controls. Its CEO has resigned, and the firm now has a new chairman.
Australia’s Westpac yesterday named a new chairman to take over from Lindsay Maxsted, as the lender continues a series of changes to senior figures after regulatory claims of major anti-money laundering and anti-terrorism financing failures.
John McFarlane, who has also been named as a non-executive director, will take over as chairman on 2 April this year, and start his NED role in February, once regulators have blessed his appointment, the bank said in a statement.
Prior to this, McFarlane was chairman at Barclays in London and also chairman of TheCityUK, an industry body involved in pushing ideas about the UK’s financial services sector, currently contemplating life outside the European Union after 31 January. McFarlane has been a board director at five major financial institutions over the past 27 years. His career includes top-level roles at ANZ, Standard Chartered and Citicorp.
“Mr McFarlane is not only well known in Australia and New Zealand, but is a respected banking leader globally who brings to our organisation more than 44 years’ experience in financial services. He has worked across retail and wholesale banking and markets, as well as in life and general insurance, and has board and public service experience in this and other fields,” Maxsted said in the statement.
In November 2019 Brian Hartzer, Westpac chief executive, resigned following regulatory claims of major anti-money laundering and anti-terrorism financing failures. Hartzer’s departure added to those of other CEOs around the world brought down by lapses in handling potentially dirty money in recent years. Peter King, chief financial officer, is acting CEO. As chairman-elect, McFarlane will be responsible for naming a permanent CEO.
"People close to me know that on my return to Australia, I hadn’t intended to take another major leadership role. However, I’m passionate about the Australian banking sector, and I’m excited by the challenge of returning Westpac to its place as a leading global bank, following recent events,” McFarlane said.
"To some extent, the internal and external challenges ahead for Westpac are not dissimilar to those in my last five financial institutions, and I have therefore grown comfortable about my capacity to work with the board and management to effect the necessary change. Nevertheless, I’m sufficiently battle-hardened to realise things can be tougher than you think and that in banking, nothing is ever certain. My focus initially will naturally be on resolving the company’s current issues but equally important, to position it as quickly as possible for long-term success,” he said.
"The appointment of a world-class CEO can take time. In the interim, momentum is important. I will work closely with Peter King and the board to continue to make any changes necessary. People should expect to see positive change during this period,” he said.
McFarlane has returned to live in Australia permanently.
Last year the Australian Transaction Reports and Analysis Centre, or AUSTRAC, said that it was seeking civil penalties from Westpac because of what it calls "systemic non-compliance" with anti-money laundering and counter-terrorism financing laws. The organisation claims that the bank broke AML/CTL laws on more than 23 million occasions.
Australia’s banking and wealth management sector has been hit by a number of misdeeds and oversights. Late in 2017, the government created a Royal Commission to probe into a raft of problems concerning mis-selling, weak AML controls and lapses, and other shortcomings. Senior figures at a number of banks have resigned and been replaced. (See a collection of stories here.)