I’m not going anywhere: Westpac’s Peter King says there is more to do

A top level executive shake-up has stoked succession talk, but Westpac boss Peter King declares he has more to do. ‘I’m here, and I’ve got plenty to do’.

Westpac’s move to restructure the business reflects chief executive Peter King’s “thinking about the future”, ruling out plans to retire.

Speaking after announcing a decision to split its consumer and business banking division in two to refocus the bank on growth after a string of asset sales, Mr King said the move reflected plans for the future.

“It’s the conclusion of portfolio simplification and me thinking about the future and how I want the organisation structured. I wanted to go back to a consumer business construct to see greater focus,” he told The Australian.

When the asked about planning for his own retirement, Mr King replied: “I’m here, and I’ve got plenty to do”.

From August, Jason Yetton, who rejoined the bank from Commonwealth Bank three years ago, will head its new stand-alone consumer unit while banking veteran Anthony Miller will head its business banking division.

Westpac has split its consumer and business banking operations. Picture: ChrisPavlich

The reshuffle would give the banking heads a new mission to focus on growth after the bank has spent years improving its systems following an embarrassing money-laundering rules debacle in 2019 which led to a record $1.3bn fine and an enforceable undertaking being imposed by the prudential regulator.

The move will test both banking heads to possibly succeed Mr King, who in 2019 announced plans to retire from its then post as chief financial officer before having to take the top job when Brian Hartzer was ousted following the Austrac scandal and his performance at the royal commission.

With Westpac chairman John McFarlane set to depart at the end of the year, Mr King is expected to have at least a year or two to test the internal candidates.

As part of the restructure, Westpac will dissolve its specialists business division, which was headed by Mr Yetton and housed businesses marked for sale and non-core units, including its platform and pacific businesses that would now be put into the business and wealth division.

“We’re just left with the platform’s business and that, I think, sits more naturally in the business portfolio than the consumer portfolio,” Mr King said.

“In the end, the changes are about the future. They’re about sharpening our focus and growth. I’m just lucky that I’ve got a good team that I can move across the portfolio.”

The reshuffle, which reverses Westpac’s decision to merge the consumer and business banking divisions in March 2021, will “sharpen” Westpac’s focus squarely on growth and will result in Chris de Bruin leaving the bank after more than 2½ years in the role.

“With the breakup of the consumer and business division, Chris has decided that he’ll look at external opportunities. And then I was lucky that I had Jason Yetton and Anthony Miller who can do the roles, and I’m particularly pleased to promote Nell Hutton into the WIB business,” he said, referring to Westpac’s institutional banking unit, which will now be headed by Ms Hutton.

In a note to staff, Mr Miller who takes charge of small to mid-sized businesses and wealth said businesses are at the heart of the economy.

“The current economic environment is throwing up challenges for our customers across business and wealth. However, these challenges present opportunities for us to grow and deliver for our customers and shareholders,” Mr Miller, a former Goldman Sachs investment banker said.

Mr Yetton, who will head up the retail bank that extends to 12 million customers, said “as the economy slows, many customers are facing challenging times.

“Cost of living pressures and successive interest rate rises are taking a toll. That said, the Australian economy remains resilient with low unemployment, strong population growth supported by immigration and a diversified economy”.

“Our number one priority should be helping our customers” through the economic cycle, he said.

The Westpac overhaul was backed by investors as a “rational”, but one that would also likely see costs rise after the bank earlier this year abandoned ambitions to keep expenses at $8.6bn.

Senior banking analyst at Evans & Partners Azib Khan said Westpac’s plans to keep and continue to invest in its BT platform business would be a pressure point.

“(The restructure) serves to increase our conviction in our view that Westpac will experience rising absolute costs over the next couple of years,” Mr Khan said.

JPMorgan banking analyst Andrew Triggs said the move was “a return to a more sensible operating structure” but that he worried Westpac “will be suffering from restructure fatigue”.

Intense competition has seen Westpac lagging rivals, with home loan growth in the year to May coming behind major peers Commonwealth Bank, National Australia Bank and ANZ.

Both analysts said more work was needed to power growth at the bank.

“Westpac has managed margins well in the recent past, but we remain worried about the pressure the franchise is under, given lagging Net Promoter Score metrics. In our view, this pressure is multifaceted and will require meaningful investment to turn things around,” Mr Triggs said.

“Further distraction is unhelpful.”