Westpac appoints 25-year veteran Peter King to restore bank’s reputation

The new boss will be eligible for an eye-watering salary despite being a senior executive during the beleaguered bank’s horrific child exploitation scandal.

Westpac has handed the leadership to the man who steered the major lender through the early stages of its child exploitation scandal, announcing acting chief executive Peter King will take over the role on a permanent basis.

The veteran of the bank was due to retire last year but was thrust into the main seat after former boss Brian Hartzer resigned in the wake of the AUSTRAC allegations of 23 million breaches of money laundering and counter-terrorism finance laws.

Westpac chairman John McFarlane said Mr King’s 25 years’ experience with the country’s oldest bank will be pivotal in times of destructive uncertainty as the coronavirus pandemic wreaks havoc on both the international and local economies.

“I believe we need a chief executive in place now, not later, and with full, rather than acting authority,” he said in a statement this morning.

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“On my recommendation, the board has appointed Peter King as CEO. Peter has agreed to do this for two years.

“I have built a strong relationship with Peter since we first met. He understands the bank, its business and its finances, and has the confidence of the management team, as well as my own and that of the board.”

The bank’s previous chief executive and executive team had their hefty bonuses cancelled last year due to the child exploitation scandal.

But Mr King, who was the major lender’s former chief financial officer and chief risk officer, will pocket a base salary of $2.4 million and be eligible for as much as $9.2 million including entitlements, according to the Australian Financial Review. Though the figure is unlikely to reach this high given the expected reduction to revenue as a result of the virus.

The new boss accepts he faces a massive task in leading the major lender through the coronavirus-induced crisis and looming deep recession as well as restoring its battered reputation.

Peter King and the board were berated at the bank’s AGM in December. Picture: Mick Tsikas/AAP

Mr King also spoke of the important role the major banking institutions play in supporting the community through the deadly outbreak.

“We have a critical role to play alongside government and regulators in supporting Australians and New Zealanders and our countries’ financial systems,” he said.

“My medium-term priorities remain to drive performance through our lines of business and sharper accountability, simplify the business through digital transformation, and lift our service culture and risk management capability.”

Mr King was introduced into the acting leadership position late last year in a baptism of fire at its marathon AGM soon after the AUSTRAC investigation was revealed.

Mr King and the former chairman Lindsay Maxsted were berated and abused by an angry group of shareholders, who demanded the entire board be sacked.

THE CRISIS

Westpac’s crisis began when financial watchdog AUSTRAC revealed last year it was facing charges after allegedly failing to investigate customers who made transactions possibly linked to child exploitation in the Philippines and South-East Asia.

It’s believed some of those payments may have gone towards “live-streamed child abuse”.

The lender is also accused of breaching money laundering and counter-terrorism finance laws, with Westpac publicly accused of 23 million breaches in total.