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Westpac chairman John McFarlane has announced that the bank’s interim chief executive officer, Peter King, will assume the role on a permanent basis.
Mr King previously served as group chief financial officer before taking up the role as interim CEO following the resignation of former CEO Brian Hartzer.
According to the group, Mr King has agreed to serve as CEO for the next two years to provide Westpac with managerial stability as it grapples with the economic fallout from the ongoing COVID-19 crisis.
“I believe we need a chief executive in place now, not later, and with full, rather than acting, authority,” Westpac chairman John McFarlane said.
“On my recommendation, the board has appointed Peter King as CEO. Peter has agreed to do this for two years.
“I have built a strong relationship with Peter since we first met. He understands the bank, its business and its finances, and has the confidence of the management team, as well as my own and that of the board.”
Mr McFarlane added: “He and I are also completely aligned on what needs to be done. He is the right person to take the company forward at the present time, and now has the full authority to make change and to see it through.”
Commenting on his permanent appointment, Mr King said the bank would focus on responding to the COVID-19 outbreak and supporting government and regulatory initiatives to assist affected customers and protect the financial system.
“Across our organisation, we are working hard to ensure we remain open for business so we can continue to help customers with their financial situation,” he said.
“We must also look to the future for the best way for Westpac to meet the challenges ahead. We will need to be fast, agile and responsive to customer and community needs.
“My medium-term priorities remain to drive performance through our lines of business and sharper accountability, simplify the business through digital transformation, and lift our service culture and risk management capability.”
No short-term incentives
Mr McFarlane has also revealed that the board and CEO had decided that annual short-term variable rewards for CEO and group executives would be scrapped for 2020, in “recognition of collective accountability” for the alleged financial crime outcomes in Westpac’s business, which led to the enforcement action from AUSTRAC.
Mr McFarlane concluded by noting that Westpac is preparing for challenging business conditions in the coming months.
The chairman said Westpac is expecting an increase in credit provisioning in the years ahead as a result of the economic impact of the outbreak.
“As a bank, we have an important role to play in the community at this critical time. We are responding appropriately, and the decisions we are making now, and over coming weeks and months, will make a significant difference going forward,” he said.
“However, given the impact of the coronavirus on the economy and the level of uncertainty, while it is difficult to make a reasonable assessment of its potential impact at the moment, we expect to see a rise in our credit provisioning this year and probably beyond, which will be accelerated by recently implemented accounting standards.
“We are currently working through this and will update shareholders in due course.”
[Related: Westpac launches new low-cost SME offering]