Westpac NZ risk governance needs ‘significant improvement’, says RBNZ


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An office building with the Westpac logo is seen amid the easing of coronavirus disease (COVID-19) restrictions in the central business district of Sydney, Australia, June 3, 2020. REUTERS / Loren Elliott

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Nov. 25 (Reuters) – The Reserve Bank of New Zealand (RBNZ) said on Thursday that Westpac’s local unit (WBC.AX) was to respond to risk governance and compliance issues after an independent report issued highlighted “significant deficiencies” in the supervision of the board of directors.

The report, prepared by management consulting firm Oliver Wyman, said the bank’s board had failed to meet “standard” expectations regarding the implementation of risk governance measures, and noted that the bank’s investment in risk management capabilities seemed “responsive, rather than strategic”.

“We expect Westpac NZ to prioritize corrective actions in line with the report’s recommendations and will closely monitor their efforts to ensure their effectiveness,” RBNZ Deputy Governor Geoff Bascand said in a statement.

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The report was commissioned by Westpac New Zealand on instructions from RBNZ in March.

Bascand added that while the bank’s board addressed some of the report’s findings, “there is a lot more to do.”

Westpac NZ, in a separate statement, accepted the review’s findings and said it was “well advanced” in addressing the report’s recommendations.

“We also acted immediately on the other recommendations of the report, including restructuring committees and overhauling the way risk information is provided to the board,” added the chairman of the board of directors of Westpac NZ, Pip Greenwood.

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Reporting by Sameer Manekar and Yamini CS in Bangalore; Editing by Krishna Chandra Eluri

Our Standards: The Thomson Reuters Trust Principles.

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