Westpac chairman Lindsay Maxsted says criticism of the Australia’s banking sector is “warranted” but he hopes a royal commission into alleged misconduct in the finance industry will restore trust and confidence.
Mr Maxsted told the lender’s annual general meeting in Sydney on Friday that the board was “disappointed” at the deterioration of the banking sector’s reputation but accepted there had been times when the industry had failed to meet customer expectations.
He said that while Westpac previously had argued that inquiries into the sector were unnecessary, the recently announced royal commission would restore trust, respect and confidence in Australia’s financial system.
“As a bank, and as an industry, we also underestimated the intensity of community, regulatory and government reaction when these expectations have not been met,” Mr Maxsted said.
“The board and management at Westpac understand we must proactively respond to these concerns and lift our standards to an even higher level – and we are.”
Chief executive Brian Hartzer said the banks had been a “politcal football for too long” and that the royal commission would give Westpac the opportunity to tell “our story”.
“We are embracing the royal commission as a way to finally draw a line in the sand on calls for inquiries,” Mr Hartzer told the AGM.
“While the inquiry may find issues across the industry, what I hope it will also show, is that in Westpac’s case, we are acting to fix past issues as they arise and are continuing to invest in the quality of service that we deliver to customers.”
The lender also revealed it will leave its dividend unchanged at 94 cents per share, despite the impact of the government’s bank levy, which cost Westpac $66 million in 2017 and is expected to rise to $284 million in 2018.
The levy, announced in the federal government’s May budget, applies to the big four banks and Macquarie and is expected to raise $6.2 billion.
Mr Maxsted said a decision was yet to be made on how to deal with the levy in the year ahead but reiterated the bank did not pass the levy on to customers, suppliers, or employees in 2017.
“We will continue to work on your behalf for the removal of this highly inefficient and distortive tax,” he told shareholders.
Westpac shares were 22 cents, or 0.7 per cent, higher at $31.60 at 1542 AEDT on Friday.