Westpac says number of customers on hardship payments is falling

Westpac says the peak of the cost of living crisis could be behind us with the number of Aussies needing the bank’s help to pay their loans falling.

Westpac says despite the high cost of living, Aussies are still finding a way to pay their mortgage.

Outgoing chief executive Peter King told Friday’s annual general meeting the number of customers who remain on hardship payments is falling as mortgage holders get use to higher rates.

Westpac’s outgoing chief executive Peter King says homeowners are in. Picture: NewsWire/Tertius Pickard

“The number of packages outstanding reached a peak of just below 20,000 in June and have since reduced to 17,500 at the end of November,” Mr King said.

But while the number of people on hardship provisions was falling, Mr King acknowledged “some are doing it tough with cost of living pressures.”

“Supporting customers facing hardship is a key focus of our sustainability strategy,” he said.

“We provided 47,500 hardship and disaster support packages to our customers and businesses during the year to help them get back on track.

Westpac says there has been a big drop off in the number of borrowers seeking help to pay their mortgages. Picture: NewsWire / Andrew Henshaw

“Approximately 19,000 accounts remained in hardship as we entered the new financial year.”

This reaffirms Westpac’s guidance it gave a month earlier where it said even if rate cuts didn’t occur until 2026, it is unlikely to significantly impact mortgage holders with the majority 11 months ahead.

It also said offset balances had grown by 10 per cent to $60bn, saying the bulk of customers are actually getting further ahead.

This comes as the Reserve Bank held the official cash rate at 4.35 per cent where it has now been for 13 months.

At its board meeting on Tuesday, the RBA again said Australia’s trimmed mean inflation remains above its target range of 2 to 3 per cent.

The outgoing chief executive reflected on his time at the bank, saying it was well-positioned for a modest economic recovery.

“We’ve also faced two financial crises, Basel reforms, a royal commission, a pandemic and natural disasters,” Mr King said.

“More recently our approach to risk culture and risk management has been dramatically improved, noting there is more work to do.

“Our bank is much simpler following the exit of 10 businesses.

“The next step in simplifying the bank for customers and bankers is completing the UNITE program, which we started this year and will set us up for future success.”

Westpac chair Steven Gregg and outgoing chief executive Peter King are also predicting a moderate recovery during 2024. NewsWire/Tertius Pickard

ESG concern

Despite an overall positive annual general meeting, shareholders held concerns about Westpac’s funding to known climate polluters.

Prior to the meeting, a number of leaders joined bushfire survivors and hundreds of shareholders calling on the big four Australian banks to end finance for companies expanding coal, oil and gas production.

Westpac was flagged over its ESG concerns Picture: Newswire / Gaye Gerard

Westpac chairman Steven Gregg said looked to address these issues.

“Tackling climate change and supporting the transition to a low-carbon future is one such expectation,” he said.

We are committed to taking action towards net-zero by 2050, reducing our greenhouse gas emissions, and building resilience against the impacts of climate change for a cleaner, more sustainable future.”

Offshoring jobs

Westpac was also slammed by unions and employees for its jobs that it has moved overseas.

Earlier in the year Westpac cut 132 job cuts from its risk-management, operations and sales divisions, with some of the positions expected to shift offshore to India and The Philippines.

The Financial Services Union confirmed the cuts this week and said 62 would go from the risk division, while 50 positions from operations would be offshored to contract companies Genpact, TATA Consulting Services and Concentrix.

Westpac says it does not have targets for the number of Australian or overseas roles. NewsWire / Simon Bullard

A further 20 cuts from sales were announced to the FSU in January, with the jobs also shifting abroad.

Unions questioned whether the big four banks would help retrain Australians to keep them in a local job, instead of shifting abroad.

“We have around 30,000 people on shore. Do we have specific targets for here versus offshore no we don’t it is looked at business by business,” Mr King said.

“We need to help all our employees through that, where possible, retrain would be our aspiration. I don’t think it will be static.”