Westpac head of retail banking replaced

THE head of Westpac's retail arm will go on to lead the bank's transformation program a week after its big interest rate hike.

Peter Hanlon, former head of retail and business banking at Westpac. Picture: Alan Pryke

AUSTRALIA'S second biggest lender Westpac has elevated the head of its wealth management arm to lead its retail and business banking business, as part of a management reshuffle.

Rob Coombe, BT Financial Group chief executive, replaces Peter Hanlon as group executive for retail and business banking, Sydney-based Westpac said in a statement on Monday.

Mr Hanlon will move on to lead the bank's transformation program, becoming group executive for people and transformation, responsible for modernising the system and processes in place to serve customers.

Mr Hanlon was in charge of the retail division at Westpac as it increased the variable home loan rate by almost double the central bank's rate increase last week.

"We have established a multi-brand business model with the successful merger with St George, and we have built a strong one-team culture," chief executive Gail Kelly said in the statement.

"The next phase of our transformation lies in significantly strengthening our focus on customers, people and productivity."

Westpac said Mr Hanlon would be responsible in his new role for the customer and productivity elements of the transformation program as well as corporate affairs and sustainability.

Brad Cooper, who led the St George integration, will replace Mr Coombe as chief executive of BT Financial Group.

All appointments take effect on February 1.

Westpac will provide the market with a strategy update later on Monday during Mrs Kelly and other executives will talk about the progress of the merger with St George and other changes at the bank.

However, they now have to counter negative perceptions of the bank following its decision to increase its standard variable home loan rate by 45 basis points to 6.76 per cent.

Westpac's move came after the Reserve Bank delivered its third official cash rate rise in as many months, lifting the cash rate by 25 basis points to 3.75 per cent.

Westpac blamed its larger than expected rate hike on the cost of securing term funding from offshore wholesale markets.

"Westpac has withheld passing on the full amount of the increased funding costs we have experienced to ensure we could continue to support our customers through the economic downturn," Mr Hanlon said in a statement last week, after the announcement of the rate increase.

Shares in Westpac declined 24 cents, or one per cent, to $23.80 by 1.42pm AEDT.