Westpac CEO steps down amidst scandal
Westpac CEO Brian Hartzer is stepping down after the disclosure of 23 million breaches of the anti-money laundering code.
Hartzer had been CEO of the Westpac group since 2015 and CEO of Westpac's Australian Financial Services since 2012. He also spent 10 years with ANZ, including time as CEO.
It's reported by The Australian that Hartzer's contract stipulates a 12-month notice period so he is entitled to $2.7 million in compensation.
On his departure, 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."
The news comes a day after the Westpac board announced that it would halt short-term bonuses for the bank's executive team and would close its system for facilitating overseas transactions, called Litepay. They said they were prioritising action for transactions that suggested potential child exploitation in high-risk locations with AUSTRAC.
Additionally, Westpac said it would also make investments to reduce the human impact of financial crime, committing to contributing $18 million over three years into International Justice Mission, an anti-slavery organisation.
Hartzer will step down on 2 December; current Chief Financial Officer Peter King will take over as acting CEO. The company will undertake a global search for a new CEO.
Westpac board chair Lindsay Maxstead has brought forward his retirement to the first half of 2020 and long-standing director Ewen Crouch will not seek re-election.
"The Board has asked Peter [King, acting CEO] to focus on two immediate priorities: to implement the Westpac Response Plan and continue to execute the Group's broader strategy", said Maxstead in a statement. "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."
Maxted thanked 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."