(Reuters) – The Reserve Bank of New Zealand (RBNZ), Thursday, stated that Westpac’s local arm must address compliance and risk governance concerns following an independent review that highlighted “material deficiencies” in its oversight.

Oliver Wyman management consultancy prepared the report. It stated that the board failed to meet the standard expectations for implementing risk governance and pointed out that the bank had invested in risk management capability “reactively, rather than strategically”.

“We expect Westpac NZ to prioritise remediation in line with the report’s recommendations and will be closely monitoring their efforts to ensure that they are effective,” RBNZ’s Deputy Governor Geoff Bascand said in a statement https://www.rbnz.govt.nz/news/2021/11/external-report-highlights-material-shortcomings-with-westpac-nzs-risk-governance.

Westpac New Zealand requested the commission of this report on March’s orders by RBNZ.

Bascand stated that while the bank has responded to some of the findings in the report, it still needs more.

Westpac NZ accepted the findings and made a separate statement stating that they were “well advanced in responding to the recommendations” contained in the report.

Pip Greenwood (Westpac NZ Board Chairperson) said, “We also have followed up immediately on any other recommendations in the rapport. These include restructuring committees or overhauling how information on risk to the Board.”