Westpac says it’s not the “Jetstar of banking” on mortgage rates
Westpac Banking Corporation Ltd chief executive Gail Kelly has elevated two members of her senior management team, which signals the start of a new phase of the bank’s transformation program.
Mrs Kelly was also unapologetic about the bank’s controversial rate hike last week that drew criticism from consumer groups and the federal Treasurer Wayne Swan.
Mrs Kelly also claimed Westpac had not lost a single customer since taking over St George Bank last year.
As part of its transformation process, BT Financial Group chief executive Rob Coombe on Monday replaced Peter Hanlon as group executive for Westpac’s retail and business banking.
BT Financial Group is Westpac’s wholly owned wealth management arm.
Mr Hanlon is to lead the bank’s transformation program, becoming group executive for people and transformation, responsible for modernising the system and processes in place to serve customers.
Mr Hanlon was in charge of the bank’s retail division at Westpac when it increased its variable home loan rate by almost double the central bank’s rate increase last week.
On Monday Mr Hanlon said Westpac was not the “Jetstar of banking”, referring to the standard variable mortgage rates it charged customers.
“We don’t have a price leading strategy,” he told analysts and media at a strategy presentation on Monday.
“We’re not the Jetstar of banking.”
Mrs Kelly said the bank was still competitive on price and had not lost a single customer from its transformational merger with St George Bank.
The first phase of the five-year transformational strategy has now been delivered with “a huge benefit” to the bottom line, she said, after announcing a management shuffle ahead of phase two.
Brad Cooper, who led the St George integration, will replace Mr Coombe as chief executive of BT Financial Group.
Mrs Kelly and Mr Hanlon were speaking six days after Westpac’s decision to hike its standard variable mortgage rate by 45 basis points to 6.76 per cent, with the bank blaming the move on the cost of securing term funding from offshore wholesale markets.
Commonwealth Bank of Australia and ANZ Banking Group (ANZ) raised their standard variable rates by 37 basis points and 35 basis points respectively.
National Australia Bank’s rate rise matched the RBA, at 25 basis points.
Mrs Kelly said federal politicians need to understand the bank’s need to pass on rate rises due to higher wholesale funding costs.
“I think the politicians really do understand this new environment,” she told analysts and reporters.
“They see first hand the increase in the cost of deposit taking. They want us to be here for the long run.”
Mrs Kelly described the new lending environment as “the new normal” and said all customers would pay more to borrow.
Her comments were at odds with Mr Swan who on Sunday said “any bank that used the RBA’s official rate rise as an excuse to take families for a ride this Christmas is letting down their customers and their country.”
On Monday Mrs Kelly declined to reply.
Mr Hanlon said Westpac had grown its customer numbers and increased market share at twice the average rate of its competitors over the past 12 months despite having an standard variable rate that was around 17 basis points higher than its big four rivals.
“Seventy per cent of customers buy on service and only 30 per cent buy on price,” he said.
Westpac closed down 15 cents at $23.89
AAP
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MaxL December 8, 2009
Hanlon,
We can now see your new marketing strategy “Jetstar Service at Qantas Pricing $$$”
Sounds about right to me!