Westpac’s old-school Curt Zuber exits at crucial time for banks

In a sector of the market known for its big personalities and ego, the highly regarded Zuber is old school and humble. Picture: Stuart McEvoy for The Australian.

On some counts, Curt Zuber was integral to Australia surviving the global financial crisis and over the 16 years his 100-person Westpac Treasury division has earned as much or more than the rest of the bank, yet news of his imminent departure was typically low key.

In a sector of the market known for its big personalities and ego, the highly regarded Zuber is old school and humble in a high-pressure role managing a $900bn book. The 25-year bank veteran will step down early next year, handing the reins to his long-time deputy Jo Dawson having played a key role in the bank since first being hired by now CBA director and long-time Westpac executive Rob Whitfield.

Peter King, the Westpac chief and former CFO, started at the bank about six months before Zuber and their careers have been in tandem ever since. But Zuber, 55, thinks now is a good time to step aside and start the next phase of his life.

A golf enthusiast, he has a par-three hole in the back yard of his Sydney northern beaches home and he owns a nine-hole course near Byron Bay that is being redeveloped to be ready for Christmas.

In an interview with The Australian, Zuber sings King’s praises: “A great leader who understands the detail but can get above it — is transparent and honest.”

King will need every bit of these talents as the Australian banks face decision time on some $200bn in deferred mortgages due to be wound back in the next couple of months.

A UBS survey showed 47 per cent are ready to return to normal repayments, but 53 per cent want to convert to either interest-only or a further extension.

The trouble is many of those in the latter two categories are in trouble either because they inflated their income when they got their mortgage or they have hit problems and are now on JobKeeper or JobSeeker.

Zuber explains: “The challenge for the banks is to cut their exposure and that might be the best answer for the bank and the customer. The banks must handle this decision with dignity.”

Not surprisingly, he welcomes Josh Frydenberg’s renaissance support for the banks, saying: “The government knows that if the economy is to grow then the banks have to lend more money.”

It was Zuber’s job to arrange the funds and manage the finding risks. As bank treasurer, Zuber plays the role of the banker to the bank, providing it funding and making it available to the different divisions.

Now is an unusual time, he says: “The excess liquidity means the gap between loans and deposits has never been smaller.”

He leaves the call on the RBA’s next move to others in the bank, but says the central bank “has done a great job”.

His quarter century at the bank means Zuber has a strong network of market contacts around the world and, while reading a lot about markets, says: “I’m old school. I pick up the phone.”

He joined in 1995 not long after the bank in 1992 reported a $1.6bn loss, then the biggest loss in corporate Australian ­history.

The Iowa-born trader had come to Australia at the same time with US-based finance company Household International and fell in love with the country.

He had won a baseball scholarship to a small Iowa college — Central College — and after graduation joined the firm’s treasury department rather than taking an alternate career with the Kansas City Federal Reserve.

Zuber joined Westpac as Whitfield’s deputy when Bob Joss was boss and another American, Pat Handley, was CFO.

Westpac was the main correspondent bank for Household International, so it was close to home.

He now runs a balance sheet with funding some $900bn in loans, but it was the St George Bank merger just after the GFC that saw Zuber make his mark.

St George tended to have shorter-duration paper and the trick was to get long-term paper and access to funding was the name of the game.

This taught him that price isn’t everything — it’s also about access to funds.

Westpac had a similar funding need to CBA, but without the deposit base, and therefore needed more wholesale funding.

New treasurer Jo Dawson has served as Zuber’s assistance for the last 12 years and is well schooled across the portfolio.

Zuber says he is lucky to have had several great mentors in his time as treasurer and he includes three former CFOs in Phil Chronican, now NAB chair, Phil Coffee, who has joined the Macquarie board, and Peter King.

Ironically, one of the highlights of his career was the bank’s decision to back him in fighting ASIC’s case on alleged market rigging in the bank bill swap market.

“The bank stood behind what we did,” Zuber says.

The decision meant exposing the Westpac traders to public scrutiny, but in the end Westpac was vindicated.

Over the course of his career, banks have had a rollercoaster ride in terms of public opinion, but Zuber says: “I have never been concerned about Westpac and ­believe the banks have tried to act in the long-term support of ­customers.

Privately he is a big supporter of charities, such as Gotcha4Life supporting mental health, and children’s charities, including Humpty Dumpty Foundation and Bestest Foundation, which raises money for neglected children.

The fines state

The Victorian government imposed 4.5 times the value of fines on its residents than any other state, according to figures compiled by Tasmanian-based economist Saul Eslake.

Eslake’s figures show that in the first lockdown Victoria collected $6m in fines for breaches of the COVID-19 rules, which was $2.2m more than all the other states combined.

Per 100,000 people, the government collected $89.90 in fines, against $20.10 in the other states.

Eslake’s conclusion: “Victoria’s heavy-handed, revenue-driven approach to enforcing lockdown regulations failed. It didn’t keep Victorians safe.

“Victoria could have made different choices — not just as to how it ran hotel quarantine, but in how heavy-handedly it would police lockdown restrictions, whether it would instruct police to issue warnings for inadvertent or first-time breaches of lockdown regulations, how much the fines it imposed would be, and so on.”

The COVID-19 revenue grab follows on a long track record of Victoria collecting more in fines than other states.

In the five years to 2019, the ­average fines (speeding, parking etc) collected per person was $120.96 a year, compared to the average in all other states of $79.30.

This means Victoria imposed 34 per cent more fines on its residents than other states — with NSW at $76.96 and ACT at $92.51.

Eslake noted that in NSW, drivers are given warnings about speed cameras but not so much in Victoria, which tells you something about the aim of collecting revenue rather than saving lives.