* John McFarlane to assume chairman position on April 2
* McFarlane will oversee search for a new CEO
* Analysts and investors welcome appointment
(Updates to recast lead)
By Paulina Duran and Nikhil Nainan
SYDNEY, Jan 23 (Reuters) - Australia's Westpac Banking Corp
on Thursday named a former Barclays boss as
chairman, entrusting veteran banker John McFarlane with the task
of helping to steer it through the fallout of a massive
money-laundering scandal.
McFarlane's appointment is designed to draw a line under a
period of instability at Australia's No. 2 bank. Its two top
executives stepped down two months ago, after the corporate
regulator charged Westpac with breaches of anti-money laundering
laws it said facilitated child exploitation.
Westpac's woes are part of wider ructions in the banking
industry. Three of the four banks that dominate the Australian
market have lost their leaders in the wake of damaging
revelations from a government-backed inquiry into misconduct in
the industry.
Investors and analysts welcomed the news, given McFarlane's
extensive credentials and the urgent need for stability at the
scandal-hit bank, which is still looking for a new chief
executive.
"He has significant Australian banking experience,
significant British banking experience, and the Australian
market knows him well, so I think it will be received
positively," senior Credit Suisse banking analyst Jarrod Martin
said.
McFarlane, 72, was CEO of Westpac's rival Australia and New
Zealand Banking Group for a decade during the early
2000s and was chairman of British bank Barclays until
May last year.
His career also included 18 years as an executive at
Citigroup Inc. and four years at Standard Chartered
.
One of McFarlane's first tasks on assuming the chairman role
on April 2 will be to oversee the search for a new chief
executive, with analysts already predicting his preference would
be for an external candidate.
"My focus initially will naturally be on resolving the
company's current issues but equally important, to position it
as quickly as possible for long-term success," McFarlane said in
a statement.
He warned however, that the appointment of a "world-class"
CEO could "take time".
McFarlane will also soon have to consider whether to further
cut the bank's dividends amidst higher regulatory capital
requirements and a potentially huge fine due to money laundering
law breaches.
"He will shake up the executive ranks, and he won't hurry in
appointing a CEO, he will back his own ability to be an
executive chairman," Matthew Wilson, banking analyst at Evans
and Partners said.
Westpac shares were 0.32% lower on Thursday morning, in line
with the broader market which was down 0.36%.
Westpac's money laundering scandal came to light in November
when regulator AUSTRAC launched legal action against the bank,
accusing it of enabling 23 million payments in breach of
anti-money laundering laws, including the facilitation of
offshore payments relating to child exploitation.
It led to the resignation of Chief Executive Brian Hartzer
and forced current Chairman Lindsay Maxsted to bring forward his
retirement.
At last month's annual meeting, the lender's shareholders
voted down executive pay for a second year due to investor
outrage over the scandal.
Last week, mining giant BHP Group said Maxsted will
not stand for re-election as a director on its board.
(Reporting by Paulina Duran and Nikhil Kurian Nainan; Editing
by Arun Koyyur, Tom Brown and Jane Wardell)
Barclays (BARC)
