Westpac boss says 2020 was “one of the toughest years in history”

He outlines the bank’s ‘rebuild’ plans for 2021

Westpac boss says 2020 was “one of the toughest years in history”

Westpac has outlined its plans for rebuilding in 2021 with CEO Peter King commenting that the bank’s 2020 performance was “clearly disappointing,” with profit down by 66% on the previous year.

Speaking at Westpac’s 2020 AGM, King noted that part of the fall was due to the civil proceedings filed against Westpac by AUSTRAC which resulted in a AU$1.3 billion civil penalty - he also acknowledged that COVID-19 had contributed to slowed growth in loans, higher expenses and lower margins.

“The 2020 year was one of the toughest in Westpac’s history,” King commented.

“It started with devastating natural disasters closely followed by COVID-19, which led to significant health and economic impacts for individuals, the community and many companies.”

“As a major bank, our fate is linked to the economy and we worked hard to support customers, employees, and the financial system through this time of uncertainty,” he continued.

“Our first priority is to fix. Here we are addressing our shortcomings in the management of risk, reducing customer pain points which improves the customer experience, accelerating customer remediation, and reducing the complexity of our systems.”

King said that Westpac is also looking to simplify its operations, and will be exiting some business lines to speed up decision making. The other key area of focus will be customer growth, and King said that Westpac will be looking closely at returns and at resetting its cost base.

In addition, he noted that climate change will continue to be a significant issue, and that the bank would be continuing its efforts to transition into a low-carbon economy.

“We are committed to the Paris Agreement, and we follow the approach set out in our climate change position statement,” King said.

“I think our role is to work with customers and communities to respond to the challenge, and that’s what we’ll do. We need to get the economy transitioning, and that’s where we will need to work with customers, and that transition into a low-carbon economy needs to be well planned and orderly.”

“Given the environment, our priority right now is to continue supporting customers impacted by COVID and to help them get back on their feet,” he concluded.