An independent report ordered by the Reserve Bank of New Zealand into Westpac New Zealand (Westpac NZ) has found the bank is “moving in the right direction” in addressing risk culture deficiencies.

The results of the report, prepared by Deloitte, were announced Monday by the Reserve Bank of New Zealand, which came down on Westpac NZ in March 2021 regarding “ongoing compliance issues” with reporting liquidity correctly and overall risk tolerance. The update follows the findings of a separate independent report announced in November that found “material shortcomings” in board oversight at Westpac NZ.

Deloitte found Westpac NZ’s “repatriation of its liquidity model from its parent to New Zealand and other risk management enhancements has led to an overall improvement in its liquidity control environment,” according to the Reserve Bank of New Zealand. The report “detailed a number of further recommendations to enhance the progress that Westpac NZ has made to date.”

In the aftermath of the November report’s findings, Westpac NZ overhauled its board and noted significant investments it made to improving risk culture. The bank appointed Catherine McGrath as its new chief executive in September 2021.

“We are encouraged to see that Westpac NZ has taken the necessary steps to improve its liquidity risk management and risk culture by increasing its resourcing and improving its governance processes,” said Reserve Bank of New Zealand Deputy Governor Christian Hawkesby in a press release. “We expect that the momentum built to date will allow Westpac NZ to continue the overall transition from a reactive to a proactive risk culture.”

Westpac NZ said it welcomed the findings of Deloitte’s report.

“[W]e agree that further refinements can be made, and we’ll be building that into our continuous improvement activity,” said McGrath in a statement. “Our team has put significant effort into enhancing our risk culture, and we were pleased to see that acknowledged in the report. We will continue to maintain a strong focus in these areas.”

Westpac NZ first disclosed in September 2020 the liquidity breaches reported to the Reserve Bank of New Zealand and the Australian Prudential Regulation Authority. That same month, the bank’s parent company, Westpac, agreed to pay a record AUS$1.3 billion (then-U.S. $912.6 million) to Australia’s financial crime regulator AUSTRAC related to a money laundering scandal in which Westpac failed to report more than 19.5 million international funds transfer instructions in violation of AML rules.