Westpac has overhauled its management structure and hired a potential chief executive successor as it pushes to be the country’s leading financial company.
The country’s second largest lender behind Commonwealth Bank has split its operations into two divisions, a move aimed at cutting costs.
Reducing costs and improving efficiency has been identified as a key driver of profit growth by the banks in the current subdued economic environment.
Westpac’s retail and business banking, St George Bank, RAMS and BT Financial Group will form its Australian financial services (AFS) division, to be headed by former ANZ senior banker Brian Hartzer, who will join the bank next year.
A group services division will include technology, banking operations, property services and legal, and will be led by internal appointee John Arthur.
Chief executive Gail Kelly said the changes would deliver Westpac’s next phase of its strategy to become Australia’s leading financial services organisation.
“The changes I am announcing today provide the Westpac group with the structure to take the group to the next stage of its strategic journey with the highest quality team of financial services executives,” she said in a statement.
Mr Hartzer will join Westpac in 2012 after a stint in the highly competitive UK banking market with Royal Bank of Scotland (RBS).
He previously worked in Australia with ANZ, where he impressed by overseeing improvements to the bank’s retail division.
Mr Hartzer was considered a contender for the CEO role at ANZ when John McFarlane retired in 2007, but was overlooked in favour of current CEO Mike Smith, who was recruited from HSBC.
His appointment at Westpac puts in place a clear succession path for when Mrs Kelly steps aside, despite the departure on Thursday of another potential candidate, retail and business banking head Rob Coombe.
Mr Coombe has stood down to pursue other opportunities, Westpac said.
Westpac also lost former chief financial officer and head of the institutional bank, Philip Chronican, in 2009. Mr Chronican had also been considered as a contender for the CEO’s role before Mrs Kelly replaced David Morgan in February 2008.
Retail and business banking will now be led by Westpac’s general manager of retail and regional banking Jason Yetton.
Peter Hanlon, group executive of transformation and productivity will be chief executive of AFS until Mr Hartzer arrives in the new year.
Group executive of product and operations Peter Clare will be chief operating officer of AFS.
Westpac shares lost eight cents to $19.75.
