Yahoo Finance Westpac’s new chairman on bank’s pedophile links: ‘These things happen’
Westpac’s incoming chairman has described pedophilia as a “horrible thing” but when questioned on the bank’s inadvertent involvement said, “these things happen”.
In an interview with the ABC, 72-year-old Scottish-born banking veteran John McFarlane said the major bank was in “really good shape apart from some sustained damage on the regulatory side,” referring to breaches that found Westpac had effectively facilitated transactions linked to pedophilia rings.
In November last year, the major bank was caught out for 23 million instances of money laundering failures which saw 19.5 million international fund transfers to the tune of $11 billion unreported to the regulator.
On the topic of pedophilia itself, McFarlane said it was “a horrible thing”.
"It's the one thing that you don't want to be associated with, and the one thing that you want to make sure is prosecuted and you don't deal with them,” he said.
He also expressed some surprise that the major bank had been found out for its 23 million breaches.
"But I was a little surprised actually that Westpac and the other banks did get caught on these matters because these are matters that have come up elsewhere in the world,” he added.
"But you know, these things happen."
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Westpac appointed McFarlane as its new chairman on Thursday after Lindsay Maxsted was toppled from the job alongside CEO Brian Hartzer following the money laundering scandal.
McFarlane also sought to make a distinction about the nature of Westpac’s links to pedophilia.
"There's a big difference between not reporting something, and there being a big issue with an underlying genuinely suspicious matter,” he said.
"Hopefully the regulator will differentiate between those two categories."
McFarlane will be tasked with the job of selecting a CEO to replace Hartzer.
Westpac is working with financial crime watchdog AUSTRAC to come to a settlement, and outgoing chairman Maxsted hopes that a deal can be struck by late March or early April, the ABC reported.
Yahoo Finance has confirmed McFarlane’s comments with the ABC.
‘Battle-hardened’ McFarlane’s history of turning around embattled banks
McFarlane, who steps out of retirement to take on the new role, has had previous experience in the Australian banking industry, having led ANZ Bank as its CEO between the years of 1997 and 2007.
He also has particular experience in turning around embattled banks. Maxsted vouched for McFarlane’s global industry experience and 27 years’ experience as a board member on some of the world’s major financial institutions.
“He has a proven track record in delivering results, along with cultural and organisational change,” he said.
McFarlane’s most recent role was serving as chairman to UK major bank Barclays.
“Prior to this, he delivered a successful turnaround program at UK insurer Aviva, a company similar in scale to Westpac.”
McFarlane himself said that the challenges in the new Westpac role were not dissimilar to those of the last five financial institutions he worked at. Initially, he had not intended to take another major leadership role, he added.
“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,” he said.
“Nevertheless, I’m sufficiently battle-hardened to realise things can be tougher than you think and that in banking, nothing is ever certain.”
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