Westpac breached the industry code of conduct when it closed a remote branch in the Northern Territory with no notice in 2022, sparking a jump in people needing help from local community groups, a banking industry watchdog has found.
The country’s second-largest bank made “serious and systemic” breaches of the Banking Code of Practice when it suddenly closed a branch in Tennant Creek, according to the body that enforces the code, the Banking Code Compliance Committee (BCCC).
Westpac has been sanctioned for closing a branch in the Northern Territory.Credit: Oscar Colman
When banks close branches, they must provide customers with information about alternative banking option.
However, an investigation into this closure, published today, said the bank had failed to do this. It said many customers had struggled to adapt to the closure, which led to an influx of requests for help from local community groups.
The committee said naming Westpac was the most severe action it could take.
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BCCC chair Ian Govey said: “The obligations set out in the Code are crucial for protecting customers when a bank branch closes. In this case, Westpac has fallen short of their promise to customers. Their actions have had a significant and detrimental impact on many people within the Tennant Creek community.”
A Westpac spokesman said it had closed the branch outside the standard process in response on “ongoing safety and security threats,” which included damage to the branch and an ATM.
“Customers were notified of the closure and alternative banking options via SMS ahead of closure, as well as posters in the branch. We recognise more could’ve been done to fully support our customers during the closure. As a result, we have reviewed and strengthened our branch closure protocols,” the Westpac spokesman said.
The spokesman referred to a commitment the bank made earlier this year not to make any further branch closures in regional areas until at least 2027.