Westpac mea culpa

WESTPAC chairman Lindsay Maxsted has apologised for the bank “tolerating” a trading room culture where conversations were rife with expletives.

Speaking to shareholders yesterday, Mr Maxsted said the use of profanity-laden language on the trading room floor was unacceptable.

It was “regrettable” that the bank had tolerated such a culture, he told the group’s annual meeting.

His comments come after a senior trader was quoted during a legal battle as labelling a colleague a “f...ing thief”, among other expletives.

Westpac is in a high-profile legal battle with the corporate watchdog the Australian Securities and Investments Commission over allegations the bank rigged a key lending rate.

In a series of recordings and transcripts tabled in the Federal Court in recent weeks, senior Westpac trader Colin Roden has been quoted calling rivals from another bank “dead s...s” and a colleague a “f...ing thief”, and bragging he would “f... the rate set”.

Westpac and Mr Roden have rejected ASIC’s claims that the bank tried to rig the lending rate known as the bank bill swap rate. At the meeting yesterday, a shareholder asked Mr Maxsted if he was changing the culture that had tarnished the lender.

“That is a good question ... that’s the easy one to answer,” Mr Maxsted said.

“We did have an environment in which we did tolerate it,” he said.

“That is regrettable. That is unacceptable language.”

Mr Maxsted noted Mr Roden had himself told the court that he was now “embarrassed by the language”.

Asked whether Mr Roden would apologise to other staff, Mr Maxsted said that was “up to him”. “Since we spoke to him, that behaviour has changed,” he said.

Westpac chief Brian Hartzer said staff had been warned against using such language.

“The language we’ve seen reported from private conversation is unacceptable — we’ve made that very clear,” Mr Hartzer said.

The court battle and resulting reputational damage comes at a critical juncture for the bank, which, like other lenders, is preparing for the royal commission into misconduct in the financial services industry.

The inquiry will start in February.

Mr Maxsted conceded the reputation of the broader banking industry was tarnished. “It is clear that some of the criticism of the Australian banks is warranted,” he said.

“There have been times over recent years when the financial services sector has failed to meet customer expectations.”