Westpac chief executive Brian Hartzer is stepping down and chairman Lindsay Maxsted plans to follow suit, leaving Australia's second largest bank to respond to its money laundering and child exploitation scandal under new leadership.
Mr Hartzer will step down on Monday and be replaced on an interim basis by chief financial officer Peter King, while Mr Maxsted is no longer seeking re-election at next month's AGM and will retire in "the first half of 2020".
Westpac faces a huge fine and its reputation is in tatters after financial crime watchdog AUSTRAC accused it of 23 million breaches of money laundering laws, and failing to properly monitor payments potentially linked to the streaming of child exploitation.
"The board accepts the gravity of the issues raised by AUSTRAC," Mr Maxsted said today.
"We sought feedback from all our stakeholders including shareholders and having done so it became clear that board and management changes were in the best interest of the bank."
Westpac gave Mr Hartzer 12 months' notice and will still have to pay him his $2.7 million (NZD$2.85 million) salary, although his bonuses have been forfeited.
Westpac said Mr Maxsted's departure would allow a new chairman to oversee the appointment of Mr Hartzer's permanent successor.
Long-standing director and risk and compliance committee chair Ewen Crouch has also decided not to seek re-election at the December 12 AGM, when Westpac faced the possibility of a second strike on executive pay and potential board spill.
Investment groups had urged angry shareholders to reject the lender's remuneration report for a second consecutive year, while Prime Minister Scott Morrison had been among those calling for Westpac's board to show accountability.
Westpac has lost as much as $8.06 billion (NZD$9.08 billion) from its market capitalisation since AUSTRAC announced last week it was taking the bank to court.
Westpac shares lost another 1.3 per cent yesterday, having hit a fresh 10-month low in the session.
Mr Hartzer's departure will leave ANZ as the only one of Australia's big four banks with the same CEO it had before the financial services royal commission was announced in November 2017.
Commonwealth Bank's Ian Narev left in 2018 shortly before the bank agreed to pay a record $700 million (NZD$739.5 million) fine for 53,000 breaches on money-laundering laws.
NAB, which has admitted it faces the prospect of a huge fine for multiple possible breaches of the same laws, lost chief executive Andrew Thorburn in February.
Mr Thorburn stepped down after Kenneth Hayne's final royal commission report expressed serious concerns about his leadership amid failings that included charging fees for no service.