December 8, 2017 / 12:09 AM / in a year

UPDATE 1-Australia's Westpac says banks inquiry can restore sector's reputation

* Westpac now welcomes inquiry it resisted for years - CEO

* Investigation “an opportunity to tell our story” - CEO

* Shares rise 1 pct (Adds background, CEO quote and shares)

SYDNEY, Dec 8 (Reuters) - Australia’s Westpac Banking Corporation believes a wide-ranging inquiry into the scandal-hit finance industry that it resisted for years can restore trust in the sector, its chief executive said on Friday.

The country’s biggest bank by assets had until last week said the probe was unnecessary, even though it has been caught up in the scandals that have swept through the sector in recent years and is fighting allegations in court that its staff rigged a benchmark swap rate.

“Banks have been a political football for too long. That’s why we have now accepted the need for a Royal Commission to create certainty and confidence in our banking system,” Westpac Chief Executive Officer Brian Hartzer said at the company’s annual general meeting in Sydney.

The Australian government last week bowed to opposition pressure and called the inquiry, which has the power to compel witnesses and recommend criminal charges.

Prime Minister Malcolm Turnbull said the probe was necessary to restore confidence in the financial system after years of scandals ranging from misleading financial advice to alleged breaches of anti-money laundering rules.

“The industry has a significant challenge ahead to rebuild its reputation,” Hartzer told shareholders.

“We are embracing the Royal Commission as a way to finally draw a line in the sand on calls for inquiries, and as an opportunity to tell our story,” he said.

“While the inquiry may find issues across the industry, what I hope it will also show is that in Westpac’s case, we are acting to fix past issues as they arise.”

The announcement of the year-long inquiry wiped 2 percent from Westpac stock when it was announced on Nov. 30, though the price has since recovered. The stock rose 1 percent to A$31.69 ($23.81) in morning trade on Friday, while the broader market edged 0.5 percent higher. ($1 = 1.3312 Australian dollars) (Reporting by Tom Westbrook; Editing by Stephen Coates)

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