Westpac boss says small businesses is resilient despite the Optus outage and rate rises

Westpac’s head of business banking says small businesses have been resilient in the face of the Optus outage and rising interest rates.

Westpac business unit head Antony Miller. Picture: Britta Campion

Westpac business customers ­affected by Optus’s national outage were frustrated but “also ­realistic” and none complained of “existential challenges or threats”, said the head of the bank’s business unit, Anthony Miller.

Westpac – which banks about 15 per cent of the nation’s businesses and also counts Optus and the telco’s parent company Singtel as clients – is itself an Optus customer and was unable to take or make calls during the outage.

“While there were a lot of dramatic headlines, many businesses, while interrupted or impacted, were able to eventually, by the end of the day, process things that were delayed,” said Mr Miller, who until the end of July headed Westpac’s institutional banking unit looking after the bank’s big corporate clients.

“They were in some respects frustrated but also realistic. ­People I think understand some of these challenges that emerge.”

Millions of people were unable to make calls and thousands of businesses could not execute payments from early in the morning until late in the afternoon on Wednesday.

Optus is yet to explain what caused the collapse of its phone and internet services, which left customers unable to call triple-0 on fixed lines, shut down Melbourne’s train network and cut off hospital communications.

“While there’s been some noise, we haven’t had people reach out to us and say that they faced existential challenges or threats as a result of the disruption,” Mr Miller said.

“Obviously, there was some frustration and inconvenience but businesses that I have the pleasure of looking after find a way around these things, so they’re pretty resilient and pretty capable. There’s nothing really dramatic in terms of businesses facing real challenges, but there were frustrations and challenges through the day.”

Optus is facing potential fines and the loss of lucrative government contracts in the wake of the outage.

Optus chief executive Kelly Bayer Rosmarin, who a decade ago moved in similar circles as Mr Miller as head of the institutional banking unit of Commonwealth Bank, is facing calls to compensate customers who were significantly affected by the outage.

Banks, including Westpac, were able to use backup systems and switch their networks to other telco networks.

“What’s most important is that all of the systems integral to how the bank operates – how it transfers money, how it holds it and people’s information – we have a host of backup alternative systems to ensure that functionality is not down for any material period of time,” Mr Miller said.

After joining Westpac in 2020 as head of the institutional unit, Mr Miller took over the leadership of Westpac’s business and wealth division on August 1.

The move was part of a wider restructure that split the consumer and business segments in two to pursue growth and positioned him and the head of the consumer unit, Jason Yetton as contenders to succeed Westpac chief executive Peter King in coming years.

In the few months he has run that unit, he has observed small and medium-sized businesses showing resilience in the face of a challenging period of high inflation and rapidly rising interest rates.

He said that, while a 13th increase to the cash rate to 4.35 per cent this week would certainly affect his customers, the real hit was coming from higher energy bills, more expensive parts and equipment and the higher cost of ­labour.

“Those things are just as significant, if not more, than the increase in interest rates,” he said.

“What we have seen, however, is that over the last 12 months with all of those pressure points coming through … they have been able to get through that challenge pretty well.”

He said many SMEs had been able to pass on part – or in some cases all – of the higher costs in the prices they charged customers and many had built up savings buffers over the past year.

“While the (last) increase in interest rates will impact people, and we are sensitive to that, the information and data in front of me highlights that our business bank customers seem to be well positioned to be able to handle it,” he said.

Westpac this week reported a 23 per cent jump in annual profit to $7.2bn, as higher interest rates pushed profit in the institutional and business units up 54 per cent and 77 per cent respectively over the year.

That included a tougher second half, when net profit for both units fell.

Originally published as Westpac boss says small businesses is resilient despite the Optus outage and rate rises