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Westpac hit by APRA sanctions

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    Just before the ASX opened this morning at 10am, APRA announced it had told major bank Westpac that it had to increase its liquidity coverage ratio by 10%. The increase is to remain in place until reporting breaches by the bank have been fully investigated.

    When the news broke, Westpac’s shares slid, but within two hours they had recovered and gained 1%.

    Westpac has released a statement confirming that is already addressing the problems, and CEO Peter King apologized for the failure

    “We acknowledge the findings of APRA’s review and accept the need to work faster to address our shortcomings," he said in a statement.

    The problems have arisen from its New Zealand operations.

    "Westpac Group had breached the prudential standards. Specifically, as a material offshore subsidiary WNZL’s liquidity coverage ratio (LCR) would have been below 100 per cent for much of 2019,” the bank’s statement explained.

    Westpac is currently in the midst of a risk governance review by APRA that started at the end of last year. The bank was hit just two months ago with a record $1.3 billion fine for enabling millions of ‘improper payments’.

    APRA’s deputy chair John Lonsdale said that the new penalty “sends a message to the wider banking industry that breaches of prudential standards are not acceptable”.

    Related stories:

    • APRA issues warning to banks
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    Original Article