(Bloomberg) — Westpac Banking Corp. will combine its chief risk officer, financial crime and compliance leadership roles as it seeks to deepen efforts to simplify the lender.

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Chief Risk Officer David Stephen will leave along with Les Vance, who headed financial crime and compliance, according to a statement Thursday. Ryan Zanin will become the new chief risk officer, joining from the Federal National Mortgage Association (Fannie Mae) in New York, where he held a similar role. He will start in May.

Westpac Chief Executive Officer Peter King said the appointment continues a “risk transformation” at Australia’s oldest bank, which has been plagued by compliance issues for years.

Westpac was fined a record A$1.3 billion ($930 million) in 2020 to settle the country’s biggest breach of anti-money laundering laws — a months-long saga that cost former CEO Brian Hartzer his job. The bank admitted to failures in monitoring customers for transactions related to possible child abuse, or conducting adequate risk assessment of overseas banks.

Then, last year, Australia’s securities regulator said it is probing Westpac on allegations of insider trading relating to its role in executing a A$12 billion interest-rate swap transaction in 2016.

King in the statement Thursday said Zanin is a “proven risk leader with extensive risk management experience, having held senior risk roles at some of the world’s largest financial services companies, including Fannie Mae, GE Capital and Wells Fargo.”

Staff Cuts

Australia’s fourth-biggest bank continued to reduce its headcount in the first quarter by more than 1,100 people as part of a broader cost-cutting plan, the statement said.

Meantime, the bank said cash earnings for the three months to Dec. 31 were A$1.58 billion. The lender expects to see a further decline in net interest margin through 2022.

The shares climbed as much as 3.1% in Sydney before paring gains to trade 2.2% higher as of 10:56 a.m.

Waning Impact

King said on a call with reporters the early impacts from the spread of the omicron variant, including branch closures due to staff contracting the virus or having to isolate, faded in the past couple of weeks. He’s more optimistic than he was at the beginning of the pandemic, with business and mortgage stress now below levels seen in early 2020, he said.

Westpac is aiming to have more staff return to offices from March 1, though employees would still be able to work some days from home.

(Adds share price and details on CEO outlook from ninth paragraph)

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©2022 Bloomberg L.P.


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