The Australian Prudential Regulation Authority (APRA) has removed a liquidity add-on imposed on Westpac Banking Corporation (Westpac) for breaching APRA's prudential standards on liquidity.
APRA took action against Westpac in 2020 in response to material breaches that demonstrated weaknesses in the bank's risk management and oversight, risk control framework and risk culture in its liquidity risk management and reporting.
A 10 per cent add-on was applied to the net cash outflow component of Westpac's Liquidity Coverage Ratio (LCR) calculation.
Westpac has since completed a program to remediate findings from an independent review into Westpac's liquidity risk management to APRA's satisfaction. The removal of the liquidity add-on is effective from 1 September 2022.
The capital requirement add-on of $1 billion to reflect Westpac's heightened operational risk profile remains in place.
