The Australian Prudential Regulation Authority (APRA) will reduce the $1 billion additional capital applied to Westpac Banking Corporation by $500 million in response to the bank’s progress in improving its risk governance, culture and risk management.
APRA imposed an additional $500 million in capital on Westpac in July 2019 to reflect the higher operational risk identified in the bank’s Risk Governance Self-Assessment. In December 2019, additional capital of $500 million was imposed to reflect the bank’s increased operational risk profile, mainly due to risk governance concerns.
Westpac then entered into a Court Enforcement Enterprise (CEU) with APRA in December 2020, where it committed to correcting weaknesses in its culture, governance and accountability and addressing the root causes of these issues. In response, Westpac established the Customer Outcomes and Risk Excellence (CORE) Program and appointed an independent auditor.
In recognition of the progress and improvements made by Westpac under CORE, APRA has halved the additional operational risk capital requirement with immediate effect.
The remaining additional capital value of $500 million will remain in place until Westpac completes its transition work and APRA undertakes further validation work to assess the sustainability of improvements made to risk governance, culture and accountability practices and outcomes .