Lending wars: Westpac talks up plans for business bank growth

Westpac has a clear set of plans to target agribusiness, health and professional services in order to grow its business bank and take market share from its competitors.

Westpac business and wealth chief executive Anthony Miller. Picture: Britta Campion

Westpac is targeting agribusiness, health, and professional services as key growth lines for its business bank as the lender seeks to wrest market share from its peers.

Speaking to The Australian from Rockhampton, where he is attending Beef Week, business and wealth chief executive Anthony Miller laid out his plans to push forward the business bank, which was the standout in Westpac’s first-half result this week.

“There’s some really interesting opportunities in sectors like agribusiness, health, professional services, and we’d like to see where and how we can grow in those areas over the next couple of years,” Mr Miller said.

He said agribusiness in particular was an attractive sector given its growth potential and that other sectors, such as emerging manufacturing capabilities and mining services, were also potential growth lines.

Mr Miller said he was focused on doing right by existing customers as he sought to grow the business.

He has spent the past few months travelling the country meeting with customers and getting a feel for how businesses are coping with the challenging economic environment.

“I’ve spent as much time as I possibly can getting out in front of customers, bankers and the teams … it’s given me a real feel for the business and I’m really energised by that because I think there’s a lot of opportunities for us to grow the business,” Mr Miller said.

“One thing that came about from that engagement and connection is the realisation about how good the small business community is in Australia and how well they’ve navigating the last couple of years.”

He is unfazed by talk of competition in business banking heating up.

“People say it’s competitive in business today. But it’s always been a very competitive area,” he said.

“Our focus is to really make sure we’re superb in how we service and support our existing customers. And doing that really well, you naturally grow as your customers grow.

“There are also opportunities for us to grow in certain areas where, provided we get our service proposition right, provided we get the right teams in place, we will be able to slowly but surely and steadily grow the business.”

Mr Miller took on the top job at Westpac’s business bank in August with a mandate to drive growth in the division. Coming from the lender’s institutional banking unit, he was promoted alongside newly appointed consumer boss Jason Yetton, and the pair are considered potential CEO successors once group chief executive Peter King steps down.

The half-year results handed down this week showed net profit in the business division rose 7 per cent over the six months through to March 31, as operating income grew 6 per cent and underlying costs increased 5 per cent.

Net loans rose 3 per cent, while business lending grew by 5 per cent driven by the commercial property and agribusiness sectors.

The growth was in stark contrast to the consumer bank, which had a 32 per cent slide in profit.

As profits tumble in the consumer segment, the big four banks are looking to their business divisions for growth, with stickier, and higher margins driving much of the appeal.

Westpac currently holds about 15 per cent of the market, while NAB and Commonwealth Bank have a greater share.