Westpac (ASX:WBC) share price slips amid ‘material shortcomings’ finding

The findings of a damning independent report into Westpac’s risk governance have been released today
The post Westpac (ASX:WBC) share price slips amid ‘material shortcomings’ finding appeared first on The Motley Fool Australia. –

The Westpac Banking Corp (ASX: WBC) share price is in the red this morning. This comes amid the release of an independent report highlighting “material shortcomings” in the Westpac New Zealand board’s risk governance.

The report has led the Reserve Bank of New Zealand (RBNZ) to criticise the Westpac New Zealand board.

Westpac has accepted the report’s findings. The bank stated it is already addressing the recommendations.

At the time of writing, the Westpac share price is $21.68, 0.55% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is edging 0.01% higher, while the All Ordinaries Index (ASX: XAO) is sporting a 0.06% gain.

Let’s take a look at today’s news.

Westpac share price slumps amid RBNZ criticism

The Westpac share price is slipping amid the bank’s admission its New Zealand board “fell short” in risk governance practices.

The report was commissioned by Westpac New Zealand under instruction from the RBNZ and created by consulting firm Oliver Wyman.

Its creation stemmed from the RBNZ’s concerns over Westpac New Zealand’s material compliance issues. The RBNZ stated the report has confirmed those concerns were warranted.

RBNZ deputy governor and general manager of financial stability Geoff Bascand commented on its findings:

The report’s findings highlighted material risks to effective risk governance and noted that the role played by the board fell short of the standard expected of an organisation of the bank’s scope and scale. In some cases, issues that had been acknowledged by the board for several years had not received due attention or effective remediation.

Bascand also said the report had identified “historic underinvestment in risk management capabilities” at Westpac New Zealand and noted investment appeared to be reactive, not strategic.

What did Westpac say?

In response, Westpac New Zealand chair Pip Greenwood, who took up the role last month, said following through on the report’s recommendations was a priority:

We have always aimed for high standards of risk governance but acknowledge that in the instances identified we fell short…

We’re united in our determination to keep lifting capability in this area and will continue to work constructively with the RBNZ on these matters and ensure they are up to speed with our progress and support our plans.

Since Westpac New Zealand commissioned the review, it has welcomed a new chair and 6 new directors.

A second independent report commissioned by Westpac New Zealand under order of the RBNZ will be published in the first half of 2022. It will assess the actions Westpac New Zealand has taken to improve its liquidity risks.

The post Westpac (ASX:WBC) share price slips amid ‘material shortcomings’ finding appeared first on The Motley Fool Australia.

Should you invest $1,000 in Westpac right now?

Before you consider Westpac, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Westpac wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Macquarie (ASX:MQG) is now a big four bank

After falling 15% in a month, is the Westpac (ASX:WBC) share price good value?

Is the CBA (ASX:CBA) share price premium relative to other big banks justified?

Are ANZ (ASX:ANZ) and NAB (ASX:NAB) the best ASX bank shares to buy?

Top broker says forget CBA (ASX:CBA) and buy Westpac (ASX:WBC) shares

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!