'We will get to the bottom of what has happened': Westpac CEO vows strong action

Incoming Westpac acting chief executive Peter King has vowed to deal with the serious problems raised by the financial cop AUSTRAC as he tries to bring about stability at the banking giant, after "one of the most challenging weeks in Westpac's history".

Mr King, who will take up the reins as acting CEO after this week's dramatic resignation of chief executive Brian Hartzer and the early exit of chairman Lindsay Maxsted, on Friday told the bank's 33,000 staff it was "vitally important" that Westpac deliver on its response plan to a money laundering compliance scandal.

Acting CEO Peter King, right, and Westpac chairman Lindsay Maxsted.Credit: Renee Nowytarge

Mr King also pledged that Westpac's leaders would get to the bottom of the bombshell allegations against the bank, which stands accused by AUSTRAC of breaching anti-money laundering laws 23 million times and failing to adequately vet payments potentially linked to child exploitation.

"I want to thank all of you for your contribution during what has been one of the most challenging week's in Westpac's history," Mr King said in an email to staff.

"I know it has been tough for everyone and the notion that any child has been hurt as a result of any failings by Westpac is deeply distressing. I'm truly sorry."

"We have two vitally important pieces of work ahead of us: to fix matters raised by AUSTRAC by delivering our response plan, and to deliver stability for Westpac, our shareholders, customers and you, our people."

The lender's response plan to the scandal, announced last Sunday, included an independent review that would determine accountability and an extra $80 million in spending on staff and technology to beef up its systems for fighting financial crime.

Westpac, which is Australia's oldest bank, has been thrown into a crisis by AUSTRAC's allegations. The lender will face a hefty fine and there have been separate investigations launched by other financial regulators. There is also the possibility of investor lawsuits after billions were wiped off its market value.

Mr King said the bank had already made progress in implementing its response plan, such as closing the LitePay product that was used to make the suspicious payments and appointing experts Promontory to lead the independent review.

"The board and executive team are united to deliver our response plan with speed, diligence and transparency. We will get to the bottom of what has happened and ensure our systems are fit for purpose. This is just the start and there is much more to be done," Mr King wrote.

Mr King was previously chief financial officer and is a 25-year veteran of the bank. Until this week's events, he had been planning to retire but has now said he will serve as required by the board.

"I have always admired the integrity and determination of our people to do the right thing and support each other during challenging times, and it's a trait we will need more than ever in the weeks and months to come. I will make sure we get this right, and over time, together we will restore trust and confidence in our bank."

He also sought to reassure staff of the bank's financial health, saying it remained a "strong bank" and its balance sheet was in "good shape."