Westpac expecting A$113m fine for compliance failures

Sydney

WESTPAC Banking Corp said on Tuesday (Nov 30) that it will likely be fined A$113 million (S$110 million) for alleged compliance failures across its business over many years, including charging financial advice fees to thousands of dead customers.

Australia's No 3 lender admitted to 6 civil penalty proceedings filed by the country's securities regulator, including allegations against its banking, superannuation, wealth management and its now-divested general insurance units.

The Australian Securities and Investments Commission (ASIC) had alleged that Westpac charged over A$10 million in advice fees to more than 11,000 deceased people and distributed duplicate insurance policies to over 7,000 clients.

Australia's financial sector has faced intense scrutiny since a Royal Commission inquiry in 2018 found widespread shortcomings across the industry, with charging the dead among the most common and damaging revelations.

Westpac CEO Peter King said: "The issues raised in these matters should not have occurred, and our processes, systems and monitoring should have been better."

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ASIC and Westpac will together propose the A$113 million penalty to the federal court, and the lender will remediate about A$80 million to customers, ASIC said.

ASIC deputy chair Sarah Court said that the conduct and breaches alleged in the proceedings caused "widespread consumer harm" and that Westpac must improve its systems and culture to ensure these systemic failures did not continue.

The lender's shares traded 1 per cent higher at 0137 GMT (9.37am Singapore time), after rising as much as 1.7 per cent earlier in the day. REUTERS