The besieged Australian bank has cemented the role of interim CEO following money laundering woes and several top-table departures. On the agenda is raising the compliance culture and more immediately battling the pandemic in the region.

Citing the need for management strength and stability in these globally stressed times, Westpac chairman John McFarlane has confirmed the appointment of Peter King as the permanent CEO at the bank, fixing the term for two years.

King has been a caretaker since Brian Hartzer's departure in November following exposed money laundering failings at the embattled bank. Like a number of its Australian peers, the bank has been hit by a litany of compliance lapses in tracking down dirty money. Added to months of devastating forest fires, the country and banks have been through challenging times.

“I believe we need a chief executive in place now, not later, and with full, rather than acting authority,” McFarlane said. McFarlane has returned to Australia after 27 years in senior finance roles, including top posts at ANZ, Standard Chartered and Citicorp, and most recently as chairman of Barclays in London.

In January he replaced Westpac chairman Lindsay Maxsted during a few tense months of executive churn at the bank caused by the AML probe and class action suits surfacing relating to financial failings over a number of years.

Last year the Australian Transaction Reports and Analysis Centre, or AUSTRAC, said that it was seeking civil penalties from Westpac, reporting that the bank had broken AML/CTL laws on more than 23 million occasions.

Rowing back from this, McFarlane said bonus “rewards” to the CEO and group executives would be cancelled for 2020 in early signals of some collective accountability for past failings.

King is seen as a steady pair of hands, with a Westpac tenure spanning 25 years. “He understands the bank, its business and its finances, and has the confidence of the management team, as well as my own and that of the board,” McFarlane said.

The bank said that mid-term priorities would be driving business performance through sharper accountability, simplifying business lines through digital transformation, and importantly,  lifting the service culture and risk management capabilities of the bank.

More immediately, it would be supporting customers and staff during the COVID-19 outbreak. “We have a critical role to play alongside government and regulators in supporting Australians and New Zealanders and our countries’ financial systems,” King said, adding that he was incredibly proud of how banking staff are responding to the crisis.

Viewiing the current impact of the health emergency as one difficult to asses, Westpac said it expects to see a rise in credit provisioning for the year and probably beyond, accelerated by recently implemented accounting standards. “We are currently working through this and will update shareholders in due course,” King said.