Westpac appoints new CEO, marking a new era after governance overhaul
Australia's second-largest mortgage lender, Westpac, is set to enter a new chapter with the appointment of Anthony Miller as its CEO, effective December 16, following the retirement of current CEO Peter King. This leadership change marks a significant step as Westpac aims to move beyond a turbulent period characterised by a major governance crisis and a substantial regulatory fine.
Anthony Miller, who has been with Westpac since 2020, previously led Deutsche Bank’s Australian operations. His promotion to CEO signifies a strategic move by Westpac to leverage improved governance and focus on expanding its business lending operations. The decision to elevate Miller, the head of Westpac’s business and wealth unit, underscores the bank’s commitment to enhancing its business capabilities while demonstrating a clean slate after recent controversies.
Peter King, the outgoing CEO, assumed his role five years ago following a significant regulatory scandal involving allegations that Westpac failed to prevent payments related to child exploitation. Under King’s leadership, Westpac undertook a comprehensive risk management overhaul, aiming to restore its reputation and meet regulatory expectations. This effort included a historic fine of A$1.3 billion (approximately $867 million), marking one of the largest penalties ever imposed on an Australian corporation.
The transition to Miller’s leadership reflects Westpac’s desire to distance itself from its troubled past and signal a new era of growth and stability. “We’re now in the phase which is proving to our regulators that the changes have stuck,” King noted during a call with journalists. He highlighted that the Australian Prudential Regulation Authority (APRA) still requires Westpac to hold an additional A$500 million in cash reserves to account for elevated risk levels, illustrating the ongoing regulatory scrutiny the bank faces.
As Miller prepares to take the helm, his immediate focus will be on advancing key initiatives started by his predecessor. Central to his agenda is the completion of the ongoing risk overhaul and the successful implementation of a technology-based simplification program. Miller emphasised his commitment to ensuring these projects are executed effectively while maintaining a strong focus on safe and sustainable growth.
“I back the business mix I’ve been handed, but we do think there are opportunities with the business bank,” Miller stated. He expressed confidence in the potential for growth within Westpac’s business banking sector, aligning with the bank’s strategic goals of expanding its business lending portfolio. However, Miller also stressed the importance of pursuing these opportunities responsibly, ensuring that growth is achieved in a manner that aligns with the bank’s risk management framework.
Westpac’s stock experienced a slight decline of 0.8% in afternoon trading, mirroring a broader market downturn. Despite this, the bank’s shares have more than doubled during King’s tenure, reflecting the market’s recognition of the improvements made under his leadership. The broader market has seen a more modest increase of around 20% during the same period.
Nathan Zaia, an analyst at Morningstar, commented on the leadership change, stating, “We would not expect the new leadership to change the direction or outlook for Westpac.” He highlighted that Miller’s primary challenge will be the successful execution of the ongoing technology simplification efforts, which are crucial for streamlining operations and enhancing efficiency.
Westpac’s leadership transition follows a similar move by National Australia Bank (NAB), which appointed Andrew Irvine as CEO earlier this year to succeed Ross McEwan. This trend reflects a broader shift within Australia’s banking sector as major financial institutions seek new leadership to navigate evolving market conditions and regulatory challenges.