Westpac hit with A$1.3 billion fine for Austrac scandal

Westpac has been hit with a massive fine. Photo / Getty Images

Westpac has been forced to cough up more than a billion dollars in penalties to the financial crimes watchdog for making 23 million financial law breaches in 2019.

Australia's second-largest bank has been ordered to pay Austrac A$1.3 billion ($1.4b) after investigations last year revealed it had allowed transactions and transfers that funded terrorism and human trafficking.

Westpac set aside A$900 million in its 2020 half-year results in anticipation of a fine.

In a statement this morning a Westpac NZ spokesperson said: "the proceedings did not relate to Westpac NZ which is subject to independent oversight by the Reserve Bank of New Zealand under New Zealand AML/CFT laws. Westpac NZ has robust risk management and governance practices."

A dispute between Austrac and Westpac was lodged in the federal court earlier this year to determine the total payout and the number of breaches.

In a statement issued on Thursday, Westpac admitted to the total number of breaches claimed by Austrac.

The bank had originally admitted to about 19 million of the financial crime violations after an internal probe, instead of the 23 million alleged by the regulator.

Westpac chief executive Peter King. Photo / Getty Images

Westpac chief executive Peter King said the bank was apologetic for its failings relating to the historical transactions, which were not flagged as suspicious at the time.

"We are committed to fixing the issues to ensure that these mistakes do not happen again," he said.

"This has been my number one priority. We have also closed down relevant products and reported all relevant historical transactions."

- News.com.au