Westpac (ASX:WBC) share price higher following APRA update

The Westpac Banking Corp (ASX:WBC) share price is on the move on Friday after APRA announced that it has closed its investigation…

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The Westpac Banking Corp (ASX: WBC) share price is pushing higher on Friday.

At the time of writing, the banking giant's shares are up 0.5% to $24.65.

Why is the Westpac share price rising today?

This gain appears to have been driven by a positive investor reaction to an announcement this morning.

That announcement reveals that the Australian Prudential Regulation Authority (APRA) has closed its investigation into matters related to the AUSTRAC proceedings.

This follows the conclusion of ASIC's AUSTRAC-related investigation in December 2020.

What did APRA say?

APRA advised that it commenced its investigation into Westpac in December 2019 to examine prudential concerns arising from allegations by AUSTRAC that the bank had breached anti-money laundering and counter-terrorism laws.

In addition to this, APRA's investigation examined the bank's actions to rectify and remediate the issues after they were identified.

This morning APRA revealed that after carefully considering the results of ASIC's investigation, it has decided to close its investigation.

However, Westpac remains subject to a court enforceable undertaking to implement an integrated risk governance remediation plan. This has been designed to increase risk governance across its business and will be subject to ongoing independent reviews.

Furthermore, the $1 billion operational risk capital add-on, which reflects the bank's heightened operational risk prole, will remain in place until Westpac completes its remediation under the court enforceable undertaking to APRA's satisfaction.

APRA's Deputy Chair, John Lonsdale, commented: "Although the investigation has not found evidence of breaches of the Banking Act or the BEAR, APRA remains determined to ensure Westpac rectifies its risk governance weaknesses effectively and sustainably.

"Under the enforceable undertaking, Westpac has clearly defined Executive and Board accountabilities for the implementation of its integrated risk governance remediation plan. APRA will be holding Westpac to account for the delivery of the required improvements," Mr Lonsdale said

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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