Westpac announces management changes as it outlines cost-cutting plan

Westpac chief executive Peter King has announced a management restructuring that will lead to two departures from its management team, as the lender said pressure on profit margins prompted it to present a plan to cut costs from the head office.

The banking giant said Thursday that cash profits rebounded 74% to $1.58 billion in the first quarter, but the rebound was almost entirely due to gains on asset sales and revaluations, and profits n had only increased by 1% once these “notable items”. were excluded.

The lender’s profit margins – which have been a major concern in financial markets in recent months – have also narrowed sharply due to fierce competition, and he warned of increased pressure on margins ahead.

Westpac CEO Peter King said he has begun implementing part of his cost-cutting plan by seeking to reduce the size of his corporate functions by around 20%.Credit:Jessica Hromas

In response to the pressure on its profits, the bank announced that it presented a plan to simplify its structure and reduce costs. Last year, Mr King said the lender would aim to reduce its cost base to $8 billion by 2024, and on Thursday he said he had started implementing part of that plan. seeking to reduce the size of its corporate functions by approximately 20%. More than 1,100 jobs, including contractors, have already been cut in the last quarter.

“We have started the year well and are seeing the financial benefits of our simplification programs. The environment, however, remains very competitive and we continue to see pressure on margins,” said Westpac Chief Financial Officer Michael Rowland.

“Given this, we are advancing our simplification plans and changing our operational structure to improve efficiency and bring our employees closer to the customers they support.

As part of a management restructure, Westpac is also combining two senior roles – chief risk officer and group director for financial crime, compliance and conduct – with the two executives in those roles, David Stephen and Les Vance. , to leave the bank.

The latest restructuring comes after the bank raised the profile of the role of director of financial crime following a huge money laundering scandal in 2019.

“Two years ago, we elevated Financial Crime to a dedicated leadership role to ensure we had a single focus on improving our performance. While there is still work to be done, now is the time to simplify responsibilities with our entire risk function under the CRO,” Mr. King said.

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