On the alleged failings in its vetting of customers who may be linked to child exploitation, he said: “Like everyone who has read the statement of claim, I am personally disgusted and appalled by the subject matter of some of these transactions." Loading Replay Replay video Play video Play video The comments from Mr Hartzer came as financial markets braced for a hefty fine, amid some predictions the penalty could rival the $700 million penalty paid by Commonwealth Bank for its breaches in 2018, with one analyst estimating a penalty of up to $3.7 billion. With the bank expected to seek a settlement, Mr Hartzer told journalists on Wednesday afternoon he agreed and accepted the case against the bank "almost overwhelmingly". However, he hit back at the regulator's claim of "indifference" by senior management, by arguing the bank had dramatically lifted spending on compliance, and several people involved had left the bank. “There’s one thing that I do take issue with, and that is the suggestion that at least at a senior executive level or board level, that we have been indifferent,” he said.

Illustration: Matt Golding Credit: Mr Hartzer, who has been CEO since 2015, responded to a question about whether he might be forced to resign over the scandal by saying: “My commitment is to do what I can do and that is to get to the bottom of this, to make sure we fix it, so it never happens again, and that's what I'm going to do.” Mr Hartzer said he had made changes to Westpac's management of money-laundering risks as CEO, and he was committed to seeing these changes through. A key plank of AUSTRAC's case is that the bank failed to report more than 19.5 million international funds transfer instructions (IFTIs) worth more than $11 billion over almost five years. AUSTRAC alleges senior management were aware of "long-standing non-compliance" with this part of the law, but failed to make resolving this problem a priority.

Loading It also said that in June 2016, "senior management" in the bank were briefed on the risks of frequently low-value payments to the Philippines and south-east Asia, but it was not until 2018 that the bank implemented an automated system to "red flag" such suspicious patterns. Mr Hartzer said he became aware of the problems that led to the under-reporting of IFTIs last year, and he became aware AUSTRAC had identified problems with customer due diligence about a month ago. Investors reacted by pushing Westpac shares 3.3 per cent lower, to $25.67, as the market braced for a hefty fine. Bell Potter analyst TS Lim told clients he estimated the bank's potential liability was up to $3.7 billion.