Westpac cuts staff, shutters some Asian operations

Westpac to pull back from the region to focus on its core Australia and New Zealand business.

Westpac CEO Peter King. Westpac will exit operations in China, Hong Kong, India and Indonesia. Picture: Jane Dempster/The Australian.

Westpac will shutter its operations in a number of international markets, including China, culling about 200 staff in the process, as it looks to focus on its core Australia and New Zealand business.

The major lender on Wednesday announced the consolidation of its international operations into three branches across Singapore, London and New York, in a move that will see its presence in Beijing, Shanghai, Hong Kong, Mumbai, and Jakarta wound up over the coming 12 to 24 months.

Acting Westpac Institutional Bank chief executive Curt Zuber said the bank’s priority was to focus on its Australian and New Zealand customers and support them in areas where it has scale and capability.

“Westpac Institutional Bank will be focusing our international footprint in three critical locations and streamlining the product set and customers we support outside Australia and New Zealand.

“Our ambition is to be the leading Australian and New Zealand focused institutional bank for customers while delivering sustainable returns,” he said.

“We are fully committed to supporting our employees, customers and partners through these changes,” Mr Zuber said.

The changes are not expected to have a significant impact on cash earnings and, over time, will improve the group’s capital efficiency, including by reducing risk-weighted assets by over $5bn, the lender said.

Between 150 and 200 staff will be made redundant as a result of the closures, with most of those understood to be in-country employees.

The exit from China brings to an end a 34-year presence in the country, after Westpac became the first Australian bank to open an office in China in 1986.

Its departure from India, meanwhile, comes just eight years after it opened its first branch in the country with an ambition to deepen trade and investment flows between the two nations.

Westpac’s consolidation of its international operations comes months after it flagged a strategic review of a number of its businesses, suggesting further exits may be in the pipeline.

Among the businesses included in the review were its superannuation, wealth, investments, insurance and auto finance units, as well as its Fiji and Papua New Guinea operations.

Westpac chief executive Peter King last month refused to rule out selling the bank’s Pacific operations to a Chinese buyer, telling a parliamentary committee that “all considerations” would be taken into account as part of the review.

“That (strategic review) process is ongoing and we haven’t made any decisions about what we will do,” he said at the time.

Westpac’s winding down of its Chinese operations, as well as the potential sale of its Fijian and Papua New Guinea businesses, comes amid heightened diplomatic tensions between Australia and China

Westpac shares closed down 1.4 per cent on Wednesday, at $18.70.