Westpac boss paid $2.45m
Westpac’s New Zealand chief executive was paid almost
$2.5 million this year, the bank’s annual report shows.
David McLean received
A$2.285m (NZ$2.455m) for the year’s work, compared with
A$2.27m last year. He was one of the few executives in the group to get a pay rise year-on-year; group chief executive Brian Hartzer’s pay fell from A$6.57m last year to
A$5.05m. Most executives received less in performancebased incentives.
In his report, group chairman Lindsay Maxted said McLean received a total remuneration increase of 10.3 per cent to align his pay with the market.
The New Zealand arm of the bank reported a 3 per cent lift in net profit to $964m from $936m last year. At the same time, cash earnings lifted 3 per cent to
$1.042 billion, boosted by the sale of Paymark.
McLean said business conditions had deteriorated in the second half of the reporting period based largely on uncertainty about the outlook into next year. ‘‘Although significant risks exist globally, the local economy remains in reasonable health, our business is fundamentally sound and our balance sheet continues to be well managed.’’
He said low interest rates were
providing opportunities for firsthome buyers and others looking to make a move in the property market. ‘‘We have never seen interest rates this low in New Zealand. It helps with housing affordability and business investment, and presents a great opportunity for existing borrowers to pay down debt.’’
However, low rates also meant savers had reduced returns.
Home loans and business lending had grown 5 per cent over the year, while customer deposits had grown 4 per cent. The bank’s net interest margin – the difference between what it charges borrowers and what it pays savers – was 2.16 per cent, down from 2.24 per cent last year.
Westpac NZ had continued to focus on simplifying its business by reducing or removing 13 fees in the past year and removing five products from service or sale.
It was also proactively identifying and remedying historical issues with some products and services. ‘‘New complaints are being resolved faster and we have stepped up our training in achieving great outcomes for customers, with a second wave of mandatory workshops rolled out to employees – including non-customer facing roles – in the past few months.’’
McLean said Westpac NZ had continued to work constructively with the Financial Markets Authority and Reserve Bank of New Zealand, in relation to the regulators’ recent conduct and culture reviews of the banking and life insurance sectors.
McLean said he had received notification from the Reserve Bank in late October that Westpac NZ had satisfied section 95 requirements relating to internal credit model methodologies.
As a result, it would retain its accreditation to use the relevant internal capital models, and would no longer be subject to a
2 percentage point capital regulatory overlay.
‘‘Our agri book is also in solid shape.’’ With continued favourable conditions agri lending had increased by 4 per cent and deposits by 3 per cent.
Funds in the Westpac KiwiSaver Scheme increased by 15 per cent year-on-year, from $6.1b to
$7b at the end of September. The average balance increased 16 per cent to $17,806. Its KiwiSaver fees will drop from December 1.
The monthly administration fee would drop from $2.25 to $1 and the management fee on all open funds would be reduced by
0.1 percentage points, McLean said.