CBA, Westpac shake-up private banks, cut management numbers

Winners and job losses emerge as CBA and Westpac overhaul their private banking divisions.

Former Wallaby Phil Waugh will run Westpac private bank’s north region under the new structure.

Commonwealth Bank and Westpac are shaking up their divisions that bank wealthy customers, including removing a layer of management to overhaul reporting lines.

The Australian understands CBA recently axed three state general manager roles at the same time as internally confirming the national private bank would be led by executive manager Robyn Saranah. She had been acting in the role following a June announcement of the departure of former private bank boss Marianne Perkovic.

Rival Westpac has amalgamated roles for state-based private banking chiefs, leading to some jobs being made redundant. NSW and Queensland are being combined into a “north” private bank region to be led by one senior manager instead of two.

Former Wallaby flanker Phil Waugh — who was helping to drive Westpac’s response to COVID-19 — will lead the “north” region, while remaining states fall into the “south” region where the bank is yet to appoint a senior manager. Both regional bosses will report to Westpac’s private bank head Ashley Stewart.

Mr Waugh joined Westpac in 2017 as a national manager of auto finance after a five-year stint at CBA.

A Westpac spokesman on Tuesday confirmed the bank had made some “structural changes” to how teams were organised, saying they were aimed at delivering growth and outcomes for customers.

“As part of these changes, we are pleased to welcome Phil Waugh to the Private Wealth team where he will lead Private Wealth North,” he said.

Westpac’s private wealth unit has relationships with about 10,000 high net worth customers.

Interestingly, CBA’s changes come after the bank said earlier this month it would tip in $100m over three years to expand its private bank, which now sits within the division that houses home loans, credit cards and personal lending.

At the time, retail bank boss Angus Sullivan said almost half of the earmarked $100m investment would be spent on more bankers.

“That’s going to be a huge focus; we need the best people,” he said, also outlining more focus on digital tools, analytics and an app for wealthy customers.

The $100m CBA investment appears to be a figure net of cost savings. Savings have included CBA in July disbanding a unit within the private bank that looked after ultra-wealthy customers, or those that typically have investable assets of $10m or more.

That decision saw 15 roles being cut and several others being redeployed.

A CBA spokesman said the new private bank leadership model — without the state general managers — brought frontline teams “closer to the customer”, helping decision making. “The private bank can now draw on the retail bank’s strength in the market, scale of our branch network, and digital capability to expand its offering,” he said.

“Over the next three years we’ll be investing $100m … This will involve doubling our private banker and support teams to provide an ever better experience.”

CBA’s changes since mid-2020 have also seen the private bank get a national wealth advice team led by Maria Lykouras.

Both Westpac and CBA are understood to be offering redundancies as well as redeployment to those whose roles were impacted by the latest round of private bank restructuring.

As the banking sector works through the broader COVID-19 turmoil, including $240bn in mortgages and business loans on repayment pauses, players are attempting to keep a lid on costs. Headcount is one lever banks can pull, while some are also revisiting the size of branch networks given COVID-19 has accelerated a shift to digital channels.

Expectations are for a weak period ahead for mortgage lending and a spike in loan losses linked to the pandemic, as the economy endures its first recession in almost three decades.

National Australia Bank in May announced a spate of personnel changes, including bringing together its private bank, JBWere and nabtrade under Justin Greiner with a bigger focus on private wealth and relationships.

NAB has started a recruitment drive for 50 new bankers and advisers as part of the new model. Its private bank structure has state-based managers in addition to north and south regional leadership.

ANZ’s private bank has had a north and south leadership reporting structure for several years.

The big banks have different definitions for which customers qualify to sit within a private bank, giving them access to more products and services and a banker.

At CBA, those with annual income of more than $450,000 and the “intent to invest or borrow” $2.5m typically qualify for the private bank.

More broadly across the sector, for an investor to be classified as wholesale or sophisticated, they must meet a regulatory hurdle of annual income of more than $250,000 or have assets of more than $2.5m. That category means documentation requirements are less stringent for investment products.