The Westpac Banking Corp (ASX: WBC) share price will be on watch on Tuesday morning.
This follows the release of an update on its dealings with corporate regulator ASIC.
Why is the Westpac share price on watch?
The Westpac share price will be on watch today after the banking giant announced that it has reached agreement with ASIC to resolve six separate longstanding matters through agreed civil penalty proceedings filed in the Federal Court of Australia.
According to the release, these matters follow regulatory investigations conducted by ASIC, many instigated following the issues being self-reported by Westpac, including some which were raised during the Royal Commission.
Westpac and ASIC will jointly submit agreed proposed penalties for each of the proceedings, totalling $113 million. These penalties are subject to court approval and, positively, have been substantially provisioned (together with anticipated legal costs) in Westpac’s recent FY 2021 results.
What are the matters?
The matters include the provision of incorrect interest rate information provided to debt purchasers, the charging of advice related fees to deceased customer accounts, the incorrect issuing of duplicate general insurance policies without a customer’s consent, inadequate disclosure of adviser fees received for certain super and investment products, and superannuation products offered by BT where customers were inadvertently charged additional advisor commissions.
Westpac notes that the majority of affected customers have been compensated, and any remaining payments will be completed as quickly as possible.
“An important step”
Westpac’s CEO, Peter King, said: “As flagged, we have been working to resolve a number of outstanding regulatory matters before the Bank. We have cooperated with ASIC through the investigations and the process to get to this resolution today.”
“This outcome is an important step forward for us as we continue to fix issues and build stronger risk foundations. In each of these matters, Westpac has fallen short of our standards and the standards our customers expect of us. The issues raised in these matters should not have occurred, and our processes, systems and monitoring should have been better. We are putting things right and unreservedly apologise to our customers,” Mr King added.