Westpac drops OzForex account

Westpac has widened its review of its banking relationships with companies involved in foreign exchange markets and has added forex service providers to the list of businesses it will no longer provide with banking services.

Foreign exchange service provider OzForex announced yesterday that it had received notice from Westpac that their banking relationship was to be terminated.

In November, Westpac gave notice to remittance company customers that it would no longer provide them with banking services.

With the increased regulatory focus on money laundering and terrorism financing over the past couple of years, banks have adopted a tougher approach to managing their anti-money laundering and counter-terrorism financing obligations.

Westpac and other banks reviewed their policies and decided that, given the way remitters do business, they could not meet their regulatory obligations.

Westpac's latest move shows that it is not just remitters that the bank is uncomfortable dealing with.

OzForex issued a statement to the Australian Securities Exchange, saying "it is understood that this decision does not reflect any concerns that Westpac has specifically with the OzForex business."

OzForex said it had banking relationships with 15 financial institutions around the word, including National Australia Bank and Macquarie Bank, and would move the business currently done with Westpac to other banks.

The company issued a second statement, saying Westpac's decision had nothing to do with issues surrounding the Swiss National Bank's decision to remove the cap on the Swiss franc versus the euro, although it said it had been adversely affected by this event.

OzForex head of investor relations, Linda Cox, said: "We are in the international payments business. We are not a remitter and, as a deliverable foreign exchange business, we are not structured for investors."

The company made a net profit of A$12 million in the September half - 25 per cent up on the previous corresponding period.