The Hong Kong regulator has made getting out a trial for Westpac, as Australian banks try to reduce their presence in Asia.
| Westpac has been fined by Hong Kong’s financial regulator for breaching anti-money laundering and counterterrorism rules in the latest headache for the bank that is leading Australian financial institutions’ protracted retreat from Asia.
“‘De-risk and simplify’,” was the message from the Westpac boardroom to the team in charge of the bank’s Asia operations. In Hong Kong, that was complicated by the HKMA investigation. Until that was completed, the bank couldn’t progress handing back its license,” the banker said.Westpac announced in 2020 it would exit its operations in Hong Kong and mainland China as part of a wider consolidation of its international business, which means it is now operating out of a regional hub in Singapore.
Australian banks have typically underperformed in Asia where stiff local competition forced the majors to retreat from capital-heavy retail operations in the region following the global financial crisis.ANZ was hardest hit after investing heavily in a super regional strategy which it has since abandoned to focus on providing services for big institutional clients.
ANZ has encountered obstacles closing operations in Myanmar, Vietnam and elsewhere. Banks are often forced to pay staff huge redundancies to convince them to leave the company because local labour laws mean they cannot let them go even if the operations close down.
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