Westpac says some criticism of banks is warranted

Westpac is “disappointed” at the decline in banking’s reputation and hopes a royal commission will restore trust and confidence.

Westpac chairman Lindsay Maxsted says: “It is clear that some of the criticism of the Australian banks is warranted.” Pic: AAP

Westpac chairman Lindsay Maxsted says some criticism of the Australian banking sector is “warranted” and hopes a royal commission into alleged misconduct will restore trust and confidence.

Mr Maxsted told the lender’s annual general meeting in Sydney that the board was “disappointed” in the deterioration in the banking sector’s reputation, but agreed there had been times when the industry had failed to meet customer expectations.

“It is clear that some of the criticism of the Australian banks is warranted,” he said.

“As a bank, and as an industry, we also underestimated the intensity of community, regulatory and government reaction when these expectations have not been met.

“The board and management at Westpac understand we must proactively respond to

these concerns and lift our standards to an even higher level — and we are.”

Mr Maxsted said Westpac previously had argued that inquiries into the sector were unnecessary.

“However we, and the other major Australian banks, formed the view last week that it was

in the national interest for the political uncertainty and speculation around potential commissions of inquiry to end and for the government to establish its own properly constituted inquiry.

“In this context, it is our hope that, ultimately, the newly announced royal commission will play a role in restoring trust, respect and confidence in Australia’s already strong financial system.”

Chief executive Brian Hartzer said the royal commission would give the bank the opportunity to tell “our story”.

“Banks have been a political football for too long,” Mr Hartzer told the AGM. “We are embracing the royal commission as a way to finally draw a line in the sand on calls for inquiries.”

The chief executive said while the inquiry may uncover issues across the industry, he hopes it will show that Westpac is working to fix past issues as they arise.

Westpac chief executive Brian Hartzer. Pic: AFP

The lender also revealed it will leave its dividend unchanged at 94 cents per share, despite the impact of the government’s bank levy, which cost Westpac $66 million in 2017 and is expected to rise to $284 million in 2018.

With AAP