Westpac

Westpac Banking Corporation

Type	Public
Traded as	ASX: WBC NZX: WBC NYSE: WBK
Industry	Banking, financial services
Predecessor	Bank of NSW (est. 1817); Commercial Bank of Australia
Founded	1982 (1982)
Headquarters	Westpac Place, Sydney, Australia
Number of locations	1,429 branches 3,850 ATMs [1]
Area served	Worldwide
Key people	Brian Hartzer (CEO and managing director) Lindsay Maxsted (Chairman)
Products	Finance and insurance, consumer banking, corporate banking, investment banking, investment management, global wealth management, private equity, mortgages, credit cards
Revenue	A$ 21.642 billion (2015)[2]
Net income	A$ 08.012 billion (2015)[2]
Total assets	A$ 812.156 billion (2015)[2]
Number of employees	32,620 (2015)[1]
Website	www.Westpac.com.au www.Westpac.co.nz

Westpac Banking Corporation, more commonly known as Westpac, is an Australian bank and financial-services provider headquartered in Westpac Place, Sydney. It is one of Australia's "big four" banks. Its name is a portmanteau of "Western-Pacific".

As of November 2015, Westpac has 13.1 million customers, and is Australia's largest branch network, with 1429 branches and a network of 3850 ATMs. The bank is Australia's second-largest bank by assets.^[1] It is also the second-largest bank in New Zealand.

On 29 January 2015, Bank South Pacific announced that it had entered into an agreement to acquire Westpac's banking operations in Samoa, Cook Islands, Solomon Islands, Vanuatu and Tonga for A$125 million.

History

WBC headquarters in Sydney

Established in Sydney in 1817, the Bank of New South Wales (BNSW) was the first bank in Australia. Edward Smith Hall was its first cashier and secretary.^[3] During the 19th and early 20th century, the Bank opened branches first throughout Australia and Oceania, at Moreton Bay (Brisbane) in 1850, then in Victoria (1851), New Zealand (1861), South Australia (1877), Western Australia (1883), Fiji (1901), Papua New Guinea (1910) and Tasmania (1910).

• 1927: BNSW acquired the Western Australian Bank.
• 1931: BNSW acquired the Australian Bank of Commerce, which had branches in both New South Wales and Queensland.
• 1942: BNSW suspended operations in Papua New Guinea as the Japanese Army captured many of the towns in which it had branches and agencies, and bombed Port Moresby. It resumed operations in 1946.
• 1968: BNSW joins Databank Systems Limited consortium to provide joint data processing services.
• 1970: BNSW established a branch on Tarawa in Kiribati (ex-Gilbert Islands), which also took over the government savings bank. Also, the company first became listed on 18 July 1970.
• 1971: It established a branch in the New Hebrides. The next year HSBC and Commercial Bank of Australia (see below) also established branches.
• 1973: BNSW became the corporate sponsor of the Rescue Helicopter service started by Surf Life Saving Australia. The service is known today as the Westpac Life Saver Rescue Helicopter Service
• 1974: The Bank of New Zealand (20%), BNSW (20%), Bank of Hawaii (20%), and the government of Tonga (40%) established Bank of Tonga as a joint venture.
• 1975: BNSW incorporated its local business in Papua New Guinea as Bank of New South Wales (PNG).
• 1977: BNSW formed Pacific Commercial Bank in Samoa as a joint venture with Bank of Hawaii, buying into Pacific Savings and Loan Company (est. 1969), in which Bank of Hawaii had had an ownership interest since 1971.

Westpac is formed

• 1982: BNSW merged with the Commercial Bank of Australia and changed their name to Westpac Banking Corporation. WBC was framed with the mission to become a significant Western-Pacific bank from which the Westpac portmanteau is derived. The brandname incorporated the "W" which had been the logo of the Bank of New South Wales (popularly known as "the Wales").
• 1984: The original agreement between BNSW and the government in the Gilbert and Ellice Islands expired and WBC and the government of Kiribati formed Bank of Kiribati as a 51–49% joint venture. Bank of Kiribati also fulfilled the functions of a reserve or central bank.
• 1985: WBC replaced Barclays Bank in the National Bank of Tuvalu (est. 1981) in Tuvalu (ex-Ellice Islands), taking 40% of the shares as well as a 10-year management contract.
• 1988: WBC acquired the European Pacific Banking Corporation in the Cook Islands and a HSBC subsidiary, the Solomon Islands Banking Corporation, which HSBC had established as a branch in 1973. WBC also acquired HSBC's operations in Fiji and the New Hebrides, and established a branch in Niue that is the only bank in that country. (HSBC had established its branch in Fiji only some 18 months earlier).
• 1990: Bank of New Zealand sold half its shares in Bank of Tonga to WBC and half to Bank of Hawaii, giving each of them 30%. WBC bought Banque Indosuez's operations in New Caledonia and Tahiti. (Banque de l'Indochine, which later merged into Banque Indosuez, had established itself in New Caledonia in 1888 and in Papeete, Tahiti in 1905. In both places l'Indochine functioned as the bank of issue until 1966-7.)
• 1992: WBC recorded a 1.6 billion dollar loss, which at the time, was the largest loss for an Australian corporation. In this environment, the Bank dismissed staff and raided the superannuation to sustain its viability. In the process WBC came close to insolvency, and slipped from being Australia's largest to third largest bank.
• 1995: WBC sold its shares in National Bank of Tuvalu to that country's government, which now wholly owns the bank.
• 1995: WBC acquired Challenge Bank in Western Australia.
• 1996: WBC Holdings NZ bought Trust Bank, a chain of regional banks owned by Community Trusts, for NZD1.2 billion to form NZ largest bank, WestpacTrust. The bank had promised to keep the funding to Community Trusts flowing and to keep "Trust" in its name. However, Community Trust funding has slowed to a trickle, and in 2002 the bank launched a major rebranding which included dropping the "Trust" from its name. The merger of WBC and Trustbank also saw the closure of many branches around New Zealand. In towns and cities where both WBC and Trustbank existed, the bank merged redundant branches into a single branch; also it closed down many branches in rural areas and outer suburbs.
• 1996: WBC sold Challenge Bank to the Bank of Melbourne.
• 1997: WBC acquired Bank of Melbourne in Victoria, paying an estimated price in excess of A$1.4b. WBC retained the rights to the Bank of Melbourne name and logos, but in 2004 rebadged the branches as Westpac. In 2011, Westpac relaunched the brand.^[4]
• 1998: WBC sold its operations in New Caledonia and Tahiti to Société Générale, which merged them with Société Générale Calédonienne de Banque (est. 1971) and Banque de Polynésie (est. 1973), respectively.
• 2001: The government of Kiribati sought to reduce Westpac's share in Bank of Kiribati from 51 to 49%, leading WBC to sell its shares back to the government. Bank of Hawaii sold its interest in Pacific Commercial Bank (42.7%) to Westpac, which held an equal portion. WBC offered Samoan investors, who held the remaining shares, the same price it had paid Bank of Hawaii. WBC now owns 93.5% of Westpac Bank Samoa and Samoan companies and individuals own 6.5%. In Tonga, Bank of Hawaii sold its shares in Bank of Tonga to Westpac, giving WBC 60% ownership of what is now Westpac Bank of Tonga.
• 2002: WBC acquired BT Financial Group and Rothschild Australia Asset Management.
• 2004: The Reserve Bank of New Zealand required WBC to incorporate its NZ branches network. WBC sold its branch in Niue to Bank of South Pacific.
• 2008: Former St George Bank CEO Gail Kelly appointed chief executive officer and managing director.
• 2008: WBC announced that it intended to merge with the 5th largest Australian bank, St George Bank, for A$19 billion.^[5] The holders of about 95% of St George's shares voted in favour of the merger.
• 2008: On 17 November, the Federal Court of Australia approved the merger of Westpac and St.George.
• 2008 & 2009: Secret funds are secured from the Federal Reserve of USD$1.09 billion. (see Secret Bailout 2007 & 2008)
• 2011: During July, St George branches in the state of Victoria were rebadged as Bank of Melbourne branches.
• In early February 2012, Westpac announced plans to axe more than 400 domestic jobs and another 150 offshore jobs. This action was a response to much slower growth over the past several years and the desire to rationalise following Westpac's 2008 merger with St. George Bank.^[6]

Core business activities

The structure involves five key divisions including: Consumer Bank, Commercial and Business Bank, BT Financial Group, Westpac Institutional Bank and Westpac New Zealand. These five divisions serve more than 13 million customers.

Consumer Bank

Consumer Bank is responsible for sales and service of its 9 million consumer customers in Australia, assisting them with their everyday banking needs. The division covers all consumer banking products and services under the Westpac, St.George, BankSA, Bank of Melbourne and RAMS brands.

Activities are conducted through the Consumer Bank’s nationwide network of 1,429 branches, third-party distributors, call centres, 3,850 ATMs, EFTPOS terminals and internet banking services.

Business Bank

The Business Bank is responsible for sales and service of its small-to-medium enterprise, commercial and agribusiness customers in Australia, as well as asset and equipment finance and operates under the Westpac, St.George, BankSA and Bank of Melbourne brands.

Business and corporate customers (businesses with facilities typically up to $150 million) are provided with a wide range of banking and financial products and services, including specialist advice for cash flow finance, trade finance, automotive and equipment finance, property finance, transaction banking and treasury services. Sales and service activities for business and corporate customers are conducted by relationship managers via business banking centres, internet and customer service centre channels.

BT Financial Group

BT Financial Group (BTFG) is the wealth management arm of the Westpac Group, which, following the merger with St.George Bank Limited, also includes the wealth division of St.George.

BTFG designs, creates and distributes financial products that are designed to help its customers achieve their financial goals by administering, managing and protecting their assets.

Funds Management operations include the manufacture and distribution of investment, superannuation and retirement products, investment platforms including BT Wrap and Asgard, private banking, financial planning as well as equity capability and broking. Insurance solutions cover the manufacturing and distribution of life, general and lenders mortgage insurance.

Westpac Institutional Bank

Westpac Institutional Bank (WIB) delivers a broad range of financial services to commercial, corporate, institutional and government customers.

WIB operates through dedicated industry relationship and specialist product teams, with expert knowledge in transactional banking, financial and debt capital markets, specialised capital, margin lending, broking and alternative investment solutions.

Customers are supported through operations in Australia, New Zealand, the US, the UK, and Asian centres.

Westpac New Zealand

In 1861 the Bank of New South Wales opened seven branches in New Zealand. Some of the old buildings still stand, including one in Oamaru and another in Tokomaru Bay. Today this unit offers a whole range of consumer and corporate services to clients throughout New Zealand. It is the dominant provider of banking services to small to medium business, corporate and institutional organisations, and is the banker of the New Zealand government.^[7] Currently Westpac is the second largest bank in New Zealand, after the merger of ANZ and National Bank of New Zealand, with around 1.5 million customers, 3,000 shareholders and 197 branches nationwide.

On 29 September 2006 the New Zealand Commerce Commission forced Westpac to pay NZ$5.1 million for hidden foreign transaction fees; most of the fine is reimbursement to affected customers, in the order of 12% of the fees actually charged. All other banks operating in New Zealand have either already been fined or are awaiting a court case.^[8]

In October 2009 Westpac Banking Corporation (New Zealand branch) was ordered to pay the Inland Revenue Department (New Zealand) NZ$961 million in avoided taxes.^[9]

On 22 July 2014, Westpac publicly announced that they would pilot their host card emulation (HCE) mobile payments technology to customers. Westpac became the first bank in New Zealand to actively bring HCE mobile payments to market ^[10] and one of only a handful of banks globally to be using the innovative ‘digital wallet’ technology.

Westpac's three-month trial, which uses Carta Worldwide HCE technology, enables customers to securely store and access credit and debit card information in a remote and hosted ‘cloud’ environment, enabling customers to use their Android smartphones as digital wallets.

Soon after, in August 2014, Westpac NZ announced that it would be releasing the world's first augmented bank app,^[11] which adds layers of functionality to the digital wallet by enabling users to check account balances, view previous spending behaviours, pay bills and locate their nearest Westpac NZ branch or ATM. The app is also viewable in a 3D format by supported devices.

Naming rights

• Westpac Stadium in Wellington.
• Westpac Rescue Helicopters
• Westpac Halberg Award

ATM Alliance

Westpac is a member of the Global ATM Alliance, a joint venture of several major international banks that allows customers of the banks to use their ATM card or check card at another bank within the Global ATM Alliance with no fees when traveling internationally. Other participating banks are Allied Irish Banks (Ireland), Barclays (in the UK, Spain and parts of Africa), Bank of America (US), BNP Paribas (France), Ukrsibbank (Ukraine), Deutsche Bank (in Germany, Spain, Italy, Poland), and Scotiabank (in Canada, Chile, Mexico among many other countries).^[12][13]

Westpac branch in Suva, Fiji

Westpac Migrant Banking

This unit of both the Australian and New Zealand Bank offers banking facilities to those migrating to either New Zealand or Australia. Bank accounts for migrants can be opened before people arrive in the country using their easy account opening process. Credit cards and mortgages can even be approved before arrival. Westpac Migrant Banking has a representative office in London where accounts can be arranged, although the process can be done remotely from any country. Westpac plans to open a retail branch in London in 2011.^[14]

Pacific Banking

Westpac operates in seven south Pacific nations; the unit is headquartered in Sydney. The financial services offered include electronic banking (via online banking, ATMs and EFTPOS), deposit, loan, transaction accounts and international trade facilities to personal and business customers. Westpac Fiji is Westpac's Fijian operation. It is one of the largest banks in the country and has a 40% market share.

Banking Alliance for Women

Westpac Pacific Banking is a member of the Global Banking Alliance for Women, supporting initiatives in the Pacific to help women prosper and grow.^[15]

Corporate governance

Board of directors

• Lindsay Maxsted (chairman)
• Brian Hartzer (chief executive officer)
• Elizabeth Bryan
• Robert Elstone
• Peter Hawkins
• Peter Marriott
• Alison Deans
• Ewen Crouch
• Craig Dunndo

Executive team

• Brian Hartzer (chief executive officer).^[16]
• Philip Coffey (deputy chief executive officer).^[16]
• Peter King (chief financial officer).^[16]
• John Arthur (chief operating officer).^[16]
• David McLean (chief executive officer, Westpac New Zealand).^[16]
• Philip Coffey (deputy CEO).^[16]
• Brad Cooper (CEO of the BT Financial Group).^[16]
• George Frazis (chief executive, Consumer Bank).^[16]
• Dave Curran (chief information officer).^[16]
• Christine Parker (group executive, Human Resources, Corporate Affairs & Sustainability).^[16]
• David Lindberg (chief executive, Commercial and Business Bank).^[16]
• Alexandra Holcomb (chief risk officer).^[16]
• Lyn Cobley (chief executive, Westpac Institutional Bank).^[16]
• Gary Thursby (chief strategy officer).^[16]

Controversy

Manipulation of benchmark interest rates

In 2016 Westpac was mentioned in a lawsuit by Australian Securities and Investments Commission for manipulation of Australian benchmark interest rates.^[17]

US Federal Reserve borrowings

In 2009, a Westpac-owned entity secured US$1.09 billion from the US Federal Reserve. Commentary suggests this was an unusual move for the bank, given its relatively minor position in North America. The borrowings by Westpac occurred at the height of the global financial crisis and was part of a Federal Reserve move to stabilise financial markets globally. The public and government attention of the borrowings followed the release of the information by the Federal Reserve in 2011, not Westpac.^[18][19]

Funding of coal mining in New Zealand

Westpac has recently come under criticism from climate-change organisations in New Zealand for its role in funding mining company Bathurst, which has gained resource consent to mine coal on the Denniston Plateau on the West Coast of the South Island. Opponents have claimed that the mine will release up to 218 million tonnes of carbon dioxide,^[20] which will worsen the already-noticeable effects of anthropogenic climate change, as well as significantly damage an important ecosystem. Westpac have largely ignored these claims, despite over one hundred customers leaving the company because of this issue.^[21]

Corporate responsibility

In 2002 Westpac released a social impact report that outlined the bank's plan to meet international standards in the area of corporate social responsibility. This led to Westpac's assessment as the global sustainability leader for the banking sector in the Dow Jones Sustainability Index from 2004 to 2007.^[22]

Westpac has been criticised for backing logging operations on the Solomon Islands that destroy virgin rainforests.^[23] Because of this engagement, the Australian Greens have called for the Banksia Awards to be withdrawn from Westpac.^[24]

See also

• Banking in Australia
• Global ATM Alliance
• List of banks
• List of banks in Australia
• List of banks in Oceania
• Westpac House
• Westpac Life Saver Rescue Helicopter Service
• Westpac Rescue Helicopter (New Zealand)
• Westpac Stadium
• List of Westpac buildings

References

Further reading

• Narube, S. and B.T. Whiteside. 1985. "Financial Institutions and Markets in Fiji". In M. T. Skully, ed. Financial Institutions and Markets in the Southwest Pacific. London: Macmillan Press.
• Tschoegl, A.E. 2005. Foreign Banks in the Pacific: A Note. Journal of Pacific History.

External links

Wikimedia Commons has media related to Westpac.

• Westpac
• Westpac New Zealand

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