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At a market update in Sydney yesterday, Westpac chief executive Brian Hartzer revealed the major bank will increase its annual investment spend by 20 per cent to approximately $1.3 billion.
“We are increasing our annual investment by around $200 million to $1.3 billion directed towards growth, service and efficiency initiatives. This means concentrating our spend on technology, on digital, on simplification, as we hone our focus on service,” he said.
Mr Hartzer also reaffirmed Westpac’s objective of targeting an ROE of above 15 per cent by announcing new performance targets.
This includes the accumulation of more than one million new customers to the bank, a rise in products per customer and an expense-to-income ratio of below 40 per cent within three years.
In addition to this, Westpac announced it will develop a new customer service hub as part of its increased investment spend, with a view to enabling the group to look at customer needs and opportunities across the entire banking and wealth spectrum.
“[This expanded investment] also sees the continued investment in our brands, including the roll-out of the group’s new look branches, which will represent 55 per cent of the network by 2018,” Mr Hartzer added.
The increased spending will be supported by a complementary efficiency program, which will look to reduce Westpac’s expense growth run rate to two to three per cent per annum.
“Banking is undergoing a transformational change. The measures we have outlined will deliver a steep change in the service we provide to customers, while at the same time improving our efficiency and productivity,” Mr Hartzer said.
“We have set ambitious targets and we have a clear roadmap to get there.”