Westpac (WBC) shares were left all but unmoved by the release yesterday of the long mooted reorganisation of the bank by the new CEO, Brian Hartzer who took the top job in February, replacing Gail Kelly.
Another senior executive is leaving the bank on top of the handful of senior execs who have already gone as Mr Hartzer installs his own ‘people’.
Under the revamp, Westpac is splitting its retail and business-banking functions into two separate units. The split means Jason Yetton, who headed up the combined retail-and-business banking operation, has left the group,
George Frazis, currently heading up St George Bank will head the retail bank. David Lindberg, currently Chief Product Officer of Westpac, will head the business bank. Importantly Westpac is not abandoning its multi brand approach to banking.
Westpac shares fell 0.3% yesterday to $31.24 – a fall that was as much a part of the current loss of confidence in the banks by many big investors, than any real view about the changes Mr Hartzer is making.
WBC 1Y – Westpac unveils retail, business unit spilt
Mr Yetton, who has worked at Westpac for more than 20 years, will leave the bank to pursue “other opportunities,” Mr Hartzer said in yesterday’s statement.
Mr Hartzer said the new structure would bring clearer lines of accountability among his senior executive team and improve efficiency.
"By appointing a single executive for each major segment, the new structure clarifies accountability and allows us to create simpler, consistent, end-to-end processes, such as creating one way to open a transaction account or approve a mortgage. This will help to deliver efficiencies," the bank said a statement.
The approach would also allow the bank to focus product innovation on specific customer segments, he said.
Despite some pressure from analysts for the bank to merge all its bank brands under the Westpac label, Mr Hartzer made it clear that is not part of his agenda.
“We are determined to preserve the strength of our unique family of brands while becoming more agile in meeting the needs of customers and adapting to changing market dynamics," Mr Hartzer said.
"The distinct positions of each of Westpac’s brands – Westpac, St.George, BankSA, Bank of Melbourne and RAMS – will be preserved and supported by a dedicated product and marketing and digital capability. Under the new structure General Managers of each of the brands will report to George Frazis,” Mr Hartzer said in yesterday’sstatement.
The new business and commercial bank would include specialist business bankers from across the various brands, as Westpac seeks out stronger growth in the business lending market.
Yesterday’s structural and management changes came after Mr Hartzer abolished the bank’s Australian Financial Services division, which he previously led, soon after becoming chief executive.
Last month he also announced the bank was hiring Commonwealth Bank executive Lyn Cobley to replace outgoing institutional boss Rob Whitfield.
Westpac said the new structure will take effect immediately. "However, given the Group has operated under the previous structure for almost three quarters of the year, it will report its full year to 30 September 2015 financial results under the previous organisational structure.”
Analysts expect more changes to come and top a revamp in the bank’s NZ business as well.
