Westpac reshuffles its leadership deck

WESTPAC chief executive Gail Kelly has reorganised her senior management team, setting up a long-term succession plan.

WESTPAC chief executive Gail Kelly has reorganised her senior management team, setting up a long-term succession plan by adding Rob Coombe and Brad Cooper to a shortlist of internal CEO candidates.

Mr Coombe, the head of BT Financial Group, will add senior banking experience to his wealth management background, replacing Peter Hanlon as head of retail and business banking.

Brad Cooper, CEO of Westpac New Zealand before leading the successful St George Bank integration over the past 18 months, will do the opposite, adding wealth to his banking and financial services pedigree by replacing Mr Coombe.

Both executives are in their mid-40s, as is the other leading internal CEO candidate, Rob Whitfield, who is the head of the institutional bank.

Mr Hanlon, meanwhile, takes on the newly created role of group executive, people and transformation, with responsibility for the second phase of Westpac's restructure after the $12 billion scrip takeover of St George.

CLSA analyst Brian Johnson said in a note the changes were designed to nurture long-term succession candidates, after Mrs Kelly joined Westpac from St George in February last year.

In an investor and media update yesterday on the merger's progress and the continuing transformation of the bank, Westpac stood by its prediction that the St George deal would increase earnings per share by 2011. Integration spending of $392 million so far was on track for the targeted $700m, while annual savings of $234m had been taken out of the combined business. This was 19 per cent ahead of plan, and 59 per cent of an expected $400m in savings had been achieved.

Mr Cooper said customer numbers had risen across the group, flying in the face of expectations that merger complications would result in customer attrition.

Housing credit in the past 12 months had expanded by 21 per cent, or 1.9 times the rate of growth in the banking system, while household deposits had increased by 15.5 per cent, or 1.4 times system growth.

CLSA's Mr Johnson said Westpac's strategy of integrating St George and lifting overall market share was one of the most transparent of the major banks.

He said uncertainty surrounded ANZ's focus on becoming a super-regional bank and fixing its troubled New Zealand operations, and National Australia Bank's strategy of recapturing lost domestic market share and resolving its sub-scale positions in the British and US markets.

Mr Coombe said BT had a big opportunity to grow its business, with only 24 per cent of Westpac customers holding wealth and insurance products. At St George, the opportunity was even bigger, because only 8 per cent of the bank's customers held wealth and insurance products.