Leadership transition at Westpac: CEO Peter King’s tenure ends on a strong note

Westpac is poised for a new chapter as CEO Peter King prepares to step down in December after five years at the helm. King, who led Westpac through significant restructuring and risk management enhancement, presented his final annual result, marking a transition period for one of Australia’s largest banks.

Under King’s leadership, Westpac reported a net profit of $7 billion, a modest 3% dip, attributed to recent divestments. This slight decrease did not deter the bank’s robust performance; it announced a final dividend of 76 cents per share and extended its share buyback program by $1 billion, signaling a confident outlook. King credited the bank’s resilience and solid balance sheet to disciplined financial management, stable margins, and loan growth, despite external challenges.

A key achievement highlighted was Westpac’s maintenance of its net interest margin at 1.95%, a relatively minor decline given the economic landscape. The CFO, Michael Rowland, pointed to a 4% increase in total loans and a 5% rise in deposits as evidence of sound margin management. Notably, Westpac's net interest income grew by 2%, underscoring the bank's ability to navigate fluctuating market conditions.

Incoming CEO Anthony Miller, who previously led Westpac’s business and wealth division, brings a focus on growth and agility to his new role. Miller’s division posted a 13% rise in net profit, while business lending surged by 9%. The consumer division also showed strength, recording a 6% increase in net profit, even amidst intense competition within the mortgage market. Additionally, Westpac’s Institutional Bank achieved a 2% profit increase, while the New Zealand division’s profit grew by 10%, helped by a decrease in impairment charges.

While recognizing the financial pressures on some customers, King conveyed cautious optimism regarding the economy's trajectory, noting a recent uptick in consumer sentiment and the stability of the labor market. He hinted that potential rate cuts from the Reserve Bank in 2025 could offer relief to both households and businesses, though he emphasized the importance of maintaining a strong balance sheet to weather potential global uncertainties.

King’s legacy at Westpac is marked by a commitment to simplification and stability. Under his leadership, the bank has undergone substantial restructuring, including streamlining its portfolio and prioritizing risk management. His efforts have bolstered employee engagement, with Westpac’s organizational health index rising from 70% to 80%, positioning the bank in the global top quartile.

Reflecting on his tenure, King expressed confidence in Westpac’s direction, remarking, “Westpac is a simpler, stronger bank, and we are better at managing risk.” He thanked Westpac’s workforce for their commitment and dedication, as he prepares to hand over the reins to Miller, setting the stage for Westpac’s next era of growth and adaptability.