Well, the naming of former ANZ CEO, John McFarlane as the incoming chair of Westpac did nothing for the embattled bank’s share price yesterday.
The shares lost 0.3% to $25.08 in a market that sold off heavily on weak earnings results, a slightly stronger jobs report and profit-taking from the silly rally on Wednesday.
Investors are in wait and see mode to see what steps the new chair takes to revamp the bank’s management and processes in the wake of the AUSTRAC scandal.
Mr. McFarlane was named as a Non-Executive Director and Chairman-Elect of the bank and will succeed outgoing chair, Lindsay Maxsted on April 2, 2020. That is after the bank rules off its first-half results.
Mr. McFarlane is known as a change agent, a role he embraced in an interview with Westpac Wire, the bank’s PR service.
“Look, I’m not concerned about a challenge – every single major financial institution I’ve been with has been in some form of turnaround and a major reshaping,” he said.
“Westpac isn’t in that position from a core business standpoint but it is from a compliance standpoint, and therefore you know it will require a significant amount of change.
“We have to fix what’s gone wrong, we have to make good, and now we have to make sure it just doesn’t happen again.”
In a statement, he described himself as “sufficiently battle-hardened to realise things can be tougher than you think, and that in banking, nothing is ever certain.”
He said he was “excited” by the challenge of helping Westpac recover after it was last year rocked by the AUSTRAC claims of 23 million breaches of anti-money laundering laws.
“To some extent, the internal and external challenges ahead for Westpac are not dissimilar to those in my last five financial institutions, and I have therefore grown comfortable about my capacity to work with the board and management to effect the necessary change,” Mr. McFarlane said in the Westpac statement.
Mr. McFarlane was chief executive of ANZ Group from 1997 to 2007 and more recently has been chairman of Barclays Bank, the Royal Bank of Scotland, British transport operator FirstGroup and UK insurance company Aviva. At Barclays and Aviva he fired the incumbent CEO within months f taking the chair’s position.
Now he has to find a replacement from Brian Hartzer who is going, along with Mr. Maxstead, because of the incompetent way the bank (under both men) managed the multi-billion dollar money laundering claims from AUSTRAC, the key financial intelligence regulator.
“Mr. McFarlane is not only well known in Australia and in New Zealand but is a respected banking leader globally who brings to our organisation more than 44 years’ experience in financial services,” Mr. Maxsted said in the Westpac release.
“Over the past 27 years, he has been a main board director of five of the world’s leading financial institutions, including as executive and non-executive chairman, chief executive, and executive and non-executive director roles.