The bank said it is expecting to suffer a $1.43 billion hit to its first-half earnings.
Westpac is preparing for a A$900 million penalty over the money laundering scandal that saw Australia's second-largest bank lose its chief executive and chairman.
Additionally, the bank is setting aside $130 million to cover additional costs as the bank implements its response plan; an increase in provisions for customer refunds, repayments, and litigation of around $260 million; a reduction in the value of several assets costing around $70 million; and costs of changes in the provision of group life insurance of around $70 million, according to a statement on Tuesday.
Clearer Accountability Regime
New CEO Peter King said the bank is closing relevant products and recruiting an additional 200 people in financial crime and compliance and is putting in place a clearer accountability regime that will «speed up decision making, improve implementation and more clearly define responsibility and its associated risk management.»
In November 2019, Australian government financial intelligence agency Austrac accused the bank of 23 million breaches of anti-money laundering laws, including failure to monitor and report payments between known child exploiters.
New CEO and Chairman
Earlier this month, the bank named long-serving executive King as its chief executive, four months after he was appointed interim CEO, while John McFarlane, former ANZ Bank CEO and Barclays boss, began his tenure as chairman.
