Dec 12 (Reuters) - Westpac Banking Corp WBC.AX and Australia and New Zealand Banking Group ANZ.AX have missed out on a federal contract for a government home-loan scheme.
The federal minister said on Thursday that Commonwealth Bank of Australia CBA.AX and National Australia Bank NAB.AX were chosen along with 25 non-major lenders to provide loans under the government's First Home Loan Deposit Scheme, aimed at supporting first home buyers.
Australia's four biggest banks had applied for two positions on a panel of lenders for the nationwide home-affordability scheme, which will allow eligible first home buyers on low and middle incomes to buy a home with a deposit of 5%.
NAB and CBA will begin offering loans from January 2020 for the scheme.
The federal minister said that all the lenders have committed not to charge eligible customers under the scheme higher interest rates than those outside of the scheme.
The government did not give a reason for excluding Westpac, as well as the country's no.4 lender Australia and New Zealand Banking Group ANZ.AX , from the contract.
Westpac was sued three weeks ago by the country's regulators, which accused the banking giant of enabling 23 million breaches of anti-money laundering laws, including payments between known child exploiters. lender said it was "shattered" by the lawsuit and apologized to all affected as it faced a fire storm of shareholder criticism on Thursday. The uproar has already led to the departure of its chief executive, compliance head and wiped out about A$8.6 billion off its market value. "Big Four" banks are already under intense regulatory scrutiny after a government-backed inquiry into the financial sector last year exposed systematic misconduct, saddling them with a hefty remediation bill to compensate customers.