Westpac Banking Corporation has suffered a 66% profit drop this year, posting AU$2.29 billion for 2020. Cash earnings came in at AU$2.6 billion, down AU$4.2 billion when compared to the same period last year.
The bank's consumer segment provided AU$2.7 billion of the yearly cash earnings, business accounted for AU$734 million, institutional provided AU$332 million, and Westpac New Zealand pulled in AU$649 million.
Revenue dropped 2% to just over AU$20 billion.
The red and white bank has attributed the profit drop to COVID-19, along with "its own issues". Such issues included a AU$1.3 billion fine[1] for breaching the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) over 23 million times.
In September, the Australian Transaction Reports and Analysis Centre (Austrac) came to an agreement with Westpac to settle the anti-money laundering and counter-terrorism financing allegations that were raised by the watchdog in November 2019[2].
"2020 has been a particularly challenging year and our financial result in disappointing," CEO Peter King told shareholders on Monday.
"With our three priorities of fix, simplify, and perform, we are becoming a simpler and stronger bank with a renewed focus on culture to execute and improve performance," he later added.
Under the banner of "fix", the bank is hoping to address its risk management, risk culture, focus on customer remediation and "pain points", and fix its IT complexity. "Simplify" will see Westpac exit non-core businesses and "transform using digital and data to enhance the customer experience" while "perform" will focus on long-term results, such as for shareholders.
In addition to the Austrac proceedings, Westpac this year also settled two US class actions and paid customers AU$280 million for all remediation programs.
It also set up a new financial crime compliance and conduct function and implemented a new complaint management