Westpac chief executive Brian Hartzer is stepping down and chairman Lindsay Maxsted will follow suit as Australia's second largest bank reels from its money laundering and child exploitation scandal.
Mr Hartzer will step down next week and be replaced on an interim basis by chief financial officer Peter King, while Mr Maxsted is no longer seeking re-election at next month's AGM and will retire in "the first half of 2020".
Westpac faces a huge fine and its reputation is in tatters after financial crime watchdog AUSTRAC accused it of 23 million breaches of money laundering laws, and failing to properly monitor payments potentially linked to the streaming of child exploitation.
"The board accepts the gravity of the issues raised by AUSTRAC," Mr Maxsted said on Tuesday.
"We sought feedback from all our stakeholders including shareholders and having done so it became clear that board and management changes were in the best interest of the bank."
Mr Hartzer was given 12 months' notice and will still get his $2.7 million salary, but forfeits up to $20 million in bonuses.
Mr Hartzer, who succeeded Gail Kelly as CEO in February 2015, had looked set to fight on as recently as Monday, when he reportedly held a meeting with bank executives.
But his departure was announced after The Australian newspaper reported that he told executives the public "was not overly concerned" with the scandal and urged staff to focus on selling more mortgages and improving customer service.
He also told them he was "very sorry" the bank would be forced to cancel Christmas parties to protect its image, the paper said.
"I accept that I am ultimately accountable for everything that happens at the bank," Mr Hartzer said in a statement on Tuesday.
"And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves."
Mr Hartzer will forfeit 636,540 unvested share rights worth $15.56 million before Tuesday's open and - with his FY19 short-term bonus already scrapped - will also go without short-term bonuses for FY20 and FY21.
His FY18 short-term bonus was worth $1.33 million.
Westpac said Mr Maxsted's departure would allow a new chairman to oversee the appointment of Mr Hartzer's permanent successor.
Risk and compliance committee chair Ewen Crouch has also decided not to seek re-election at the December 12 AGM, when Westpac faces a possible second strike on executive pay and potential board spill.
Investment groups had urged angry shareholders to reject the lender's remuneration report, while Prime Minister Scott Morrison and Home Affairs Minister Peter Dutton have been among those calling for accountability.
Westpac has lost as much as $8.06 billion from its market capitalisation since last week's announcement that AUSTRAC was taking the bank to court.
Mr Hartzer had appeared to have weathered the fees-for-no-service scandal aired at the financial services royal commission and a customer remediation bill that has so far hit $1.4 billion.
Instead, his departure will leave ANZ as the only one of Australia's big four banks with the same CEO it had before the royal commission started its hearings in February 2018.
Commonwealth Bank's Ian Narev left shortly before the bank agreed in June 2018 to pay a record $700 million fine for 53,000 breaches on money-laundering laws.
NAB, which has admitted it faces the prospect of a huge fine for multiple possible breaches of the same laws, then lost chief executive Andrew Thorburn in February.
Mr Thorburn stepped down after Kenneth Hayne's final royal commission report expressed serious concerns about his leadership amid failings that included charging fees for no service.
Australian Associated Press