The source said the board had opted for Mr McFarlane in part because it needed a “change agent” with extensive retail banking experience, a strong track record, and a deep understanding of Australia’s banking market.
Mr McFarlane will be taking the reins after the country’s oldest bank has endured one of the most dramatic periods in its 200-year history, after the regulator AUSTRAC alleged it breached anti-money laundering rules 23 million times last year.
The scandal last year prompted the resignation of Mr Hartzer and the early retirement of Mr Maxsted, who has said he will hand over to the new chairman by the middle of this year.
The bombshell lawsuit, which the bank is expected to settle for a potentially record-breaking penalty, also wiped billions of dollars off Westpac’s market value and triggered a series of investigations from regulators and board-appointed experts.
Former Telstra chief Ziggy Switkowski, businesswoman Kerry Schott and Colin Carter, president of the Geelong Football Club, have been appointed to review the bank board’s risk, governance and accountability.