Westpac hires Ampol’s Steven Gregg as incoming chair after John McFarlane retires

Former investment banker Steven Gregg will take over as chairman of Westpac at the end of the year, succeeding John McFarlane.

Westpac has tapped Ampol chairman Steven Gregg to take on the top job at the banking major, with the former investment banker set to succeed outgoing chair John McFarlane in December.

The move comes almost 10 months after Mr McFarlane announced his intentions to retire from Westpac’s board at the bank’s last annual general meeting.

Mr Gregg, a corporate veteran of more than 35 years experience in business across a range of sectors, will replace Mr McFarlane who took on the job of Westpac chair in 2020.

Mr McFarlane, who ran rival bank ANZ for almost a decade, will remain as chair until December 14.

Subject to regulatory approvals, Mr Gregg will succeed Mr McFarlane when he is appointed non-executive director and chairman-elect on November 7, after Westpac unveils its full-year financial results.

Westpac has tapped Ampol chairman Steven Gregg as its new chair. Picture: Joel Carrett/AAP Image

Mr Gregg, who holds several board positions, also announced he would step away from several roles as part of the move to take the helm at Westpac.

This has already seen Mr Gregg announce he would retire as a non-executive director of retirement income giant Challenger Financial.

Mr Gregg will also retire as chair and non-executive director of the Lottery Corp in the first quarter of the 2024 calendar year.

Mr McFarlane said he would leave Westpac after making a commitment to shareholders three years ago to “build a customer-focused digital bank and create a leaner, more agile, and better performing company”.

“We have made great progress in achieving these goals and turning Westpac around,” he said.

“Steven is the right leader to take Westpac into its next chapter”.

Mr McFarlane said Mr Gregg would bring “deep experience chairing consumer-focused companies” to Westpac.

The move to bring in Mr Gregg as Westpac’s new chair sees the bank look outside its boardroom, picking a non-bank candidate to head up the financial institution.

Mr McFarlane had flagged in December his plans to leave the bank after succeeding Lindsay Maxsted in 2020 in the wake of Westpac’s Austrac anti-money laundering case.

This saw Westpac slugged with a $1.3bn penalty by Austrac, in the largest fine ever levied by the regulator

Mr Gregg said he was joining Westpac at a time of change for the bank.

“From my observation, Westpac is in a period of transition. After the hard work of simplification over the past three years, now is the time to look forward and have a strong ambition,” Mr Gregg said.

“My priority will be working closely with fellow directors and the management team to deliver the very best service for our customers and better returns for our shareholders.”

Mr Gregg will take on the job as Westpac faces a number of issues, including plans to co-locate the bank’s St George brand, as well as questions around a major technology upgrade.

Investment bank Barrenjoey recently upgraded its outlook on Westpac, telling investors it was “time for a turnaround” at the Sydney-based lender.

Barrenjoey analyst Jonathan Mott said Westpac was facing the consequences of systemic underinvestment in its tech stack after its acquisition of St George in 2008.

Mr Mott said while Westpac’s initial cost of upgrading and consolidating its systems was “considered uneconomic” the costs had now “come back to bite”.

Mr Mott said he expected Westpac was likely to announce a $1.1bn investment in its core banking system at its November results.

However, Mr Mott also flagged expectations a $2bn buyback would also be announced at the results.

In a recent note, investment bank UBS said market watchers were cautious on the outlook for the bank, warning Westpac was likely to “surprise to the downside”.

UBS analyst John Storey said concerns centred “around the delivery of cost out and asset sales, increasing funding and the sustainability of recent growth in mortgage lending”.