Westpac’s new boss Peter King vows to fix issues, recover trust

Acting Westpac chief executive Peter King has promised to get to the bottom of what happened in the Austrac affair.

Westpac’s acting CEO Peter King.

Acting Westpac chief executive Peter King has promised to get to the bottom of what happened in the Austrac affair and make sure the bank’s systems are “fit for purpose”.

As the bank’s independent expert Promontory Financial Group moved into the second day of its review of Westpac’s financial crime program, Mr King sent a note to all staff saying that Westpac had already made some progress.

“The products at the centre of the issues have been closed,” he said. “The board and the executive team are united to deliver our response plan with speed, diligence and transparency.

“This is just the start and there is much more to be done.”

Austrac’s statement of claim that linked payments by 12 Westpac customers through its LitePay channel to child exploitation in The Philippines precipitated a cleanout of the board on Tuesday.

Chief executive Brian Hartzer resigned, chairman Lindsay Maxsted brought forward his retirement to the first half of 2020, and non-executive director Ewen Crouch said he would not offer himself for re-election at the December 12 annual meeting.

Proxy advisers have been divided on whether the changes are sufficient.

ISS and CGI Glass Lewis have opposed the re-election of audit committee chairman Peter Marriott, while Ownership Matters has supported all resolutions.

Westpac is also facing a second strike on its remuneration report after last year’s overwhelming 66 per cent “no” vote.

Mr King, who was elevated from chief financial officer, signalled last September that he would retire once a successor was found. However, Mr Maxsted convinced him to stay for as long as he was needed.

He is considered to be a likely candidate for the position of permanent CEO.

In his message to staff, he said there were two important pieces of work — fixing the matters raised by Austrac, and delivering stability for the bank.

“I want to be very clear that Westpac is and will remain a strong bank,” he said.

“Our balance sheet is in good shape and we have been working hard to improve and invest in our business.

“We have good people and we all have a role to play in delivering our strategy, helping customers and speaking up when we see issues.”

Mr King said he would make sure that Westpac got its response plan right so that trust and confidence could be restored.

Westpac is still to announce its accountability review advisory panel, which will comprise three independent experts and provide recommendations on governance and board accountability.

The recommendations of both reviews will be made public and implemented as soon as possible, the bank said.