Westpac institutional bank chief Lyn Cobley retires

In the bank’s third major departure in as many weeks, Westpac’s head of institutional banking Lyn Cobley is retiring.

Westpac’s CEO of institutional banking, Lyn Cobley, is retiring. Picture: Renee Nowytarger

Westpac’s new chief executive Peter King is losing a third executive from his front bench in as many weeks, as the bank announced the imminent departure of head of institutional banking Lyn Cobley.

A Westpac told the ASX on Friday that Ms Cobley was retiring from banking after more than 30 years in the sector. Her departure brings further upheaval in Westpac’s executive ranks as the bank navigates the economic disruption of COVID-19 and legal action brought against it by financial crimes regulator Austrac.

It is unclear if Ms Cobley’s departure has anything to do with the looming release of a Westpac accountability review into its alleged 23 million breaches of the law, including helping to facilitate payments linked to child exploitation.

Austrac started Federal Court action in November and the parties are yet to sign off on an agreed statement of facts, even though Westpac has set aside $900m for a potential penalty.

The alleged breaches occurred largely in the institutional bank division, which Ms Cobley led for five years, but also predated her appointment to that role.

The Weekend Australian understands the accountability review will be made public by the bank in June.

A Westpac spokesman declined to comment on the timing of the release.

Ms Cobley is the third senior Westpac executive to announce this month they are leaving the bank, with consumer division boss David Lindberg and chief information officer Craig Bright departing to take up roles with Royal Bank of Scotland and Barclays respectively.

Westpac is said to have on Friday appointed consumer bank finance chief Richard Burton to acting head of the retail division, from mid-June, while a search for Mr Lindberg’s replacement occurs.

Westpac’s anti-money laundering scandal claimed the job of former CEO Brian Hartzer late last year and brought forward the retirement of former chairman Lindsay Maxsted. Mr King was appointed permanent Westpac CEO in early April by new chairman John McFarlane.

The CEO appointment was, though, made for just two years to help steer Westpac through the COVID-19 turmoil, and after Mr King reversed an earlier decision to retire from the bank.

Mr King and the Westpac board are also yet to formally appoint a permanent finance boss, as Gary Thursby continues to act in Mr King’s former role. Alastair Welsh remains in Mr Thursby’s job of operating chief in an acting capacity.

Westpac’s shares slumped 6.4 per cent to close $17.22 on Friday, but the drop wasn’t enough to erase a record weekly increase in the stock of 14.7 per cent, as the banking sector regained some favour with investors.

But Ethical Partners Funds Management investment director Nathan Parkin said the multiple departures at Westpac could pose a problem for the bank given a string of earnings headwinds and Mr King’s desire to embed a new strategy.

“If you have a CEO there for less time, and all that (executive) turnover, it potentially creates a problem for momentum in the business in the short term but also in the medium term,” he added.

“It’s not an easy period coming up for the banks... Setting direction is going to be relatively harder there (Westpac) than elsewhere.”

The major banks have set aside a combined $5bn in provisions for expected loan losses linked to the global pandemic and its domestic impact on borrowers.

In Friday’s statement, Mr King thanked Ms Cobley for leading the institutional bank over the last five years, amid a challenging period for the division.

“Lyn navigated institutional banking during a period of intense global competitive pressures and structural changes across these markets following the global financial crisis,” he said.

“Under Lyn’s leadership the Westpac Institutional Bank team has worked tirelessly to meet the needs of the bank’s government, corporate and institutional customers, most particularly during the COVID-19 pandemic.”

Ms Cobley flagged her interest in pursuing board roles after her departure from Westpac, saying it was the right time to retire from executive roles after more than 30 years in banking.

“I have thoroughly enjoyed a long and varied banking career. However, having held executive positions through a number of significant events, including the GFC and this year the COVID-19 pandemic, it is now time to step back and develop a portfolio career, including board positions,” she said.

Ms Cobley joined Westpac in 2015 from the Commonwealth Bank, where she had stints as group treasurer and executive general manager of retail products and third-party banking.

Westpac’s group treasurer and bank stalwart Curt Zuber will lead the institutional unit on an acting basis from July 1, while an international search is undertaken to fill the role.

The bank said Joanne Dawson, finance chief for Westpac Institutional Bank and Treasury, would act as group treasurer during the period.

Westpac tends to use headhunters at search firms Heidrick & Struggles and Korn Ferry to help identify candidates for key roles.

Mr Zuber has been with Westpac for 25 of his more than 30 years in the industry, and was appointed the bank’s treasurer in 2004.

He also endured Westpac’s court battle with the corporate regulator over allegations it manipulated the bank bill swap rate. While its rivals settled their respective cases, Westpac fought the action and ended up in 2018 being ordered to pay a much lower penalty of $3.3m.

Ms Dawson joined Westpac in 2003 and was appointed deputy treasurer in 2008, where her responsibilities included global funding, liquidity and balance sheet management.