MELBOURNE (MarketWatch) -- Westpac Banking Corp. (WBK 111.06, -0.53, -0.47%) said Monday it will reshuffle some of its key senior managers in a move analysts believe could indicate longer-term succession planning.
The bank also sought to play down criticism over its decision last week to raise home loan lending rates by almost double the move in the official cash rate announced by the Reserve Bank of Australia last Tuesday.
Under the management reshuffle, Peter Hanlon, who heads the group's retail and business banking arm, will take up a newly created role of group executive of people and transformation, from Feb. 1, 2010.
Rob Coombe, who currently heads the group's BT Financial Group fund management business, will take over from Hanlon, while Brad Cooper will take up the top job at BT Financial, Westpac said.
"It would appear that Rob Coombe and Brad Cooper are being groomed as potential CEO succession candidates in a move designed to enhance a broadening financial services agenda," Citi analysts said in a note.
Coombe has led BT Financial for five years, and has 25 years experience in banking, finance and wealth management, the bank said.
Cooper led the St. George Bank integration and has previously been head of the bank's New Zealand unit and chairman of GE Capital Bank and head of GE Money's U.K. and Ireland business, Westpac said.
The reshuffle was unveiled as part # of the bank's latest strategy session during which the bank responded to criticisms of its increase last week in mortgage rates.
Westpac drew condemnation from lawmakers, including Australia's Treasurer Wayne Swan, after it said it would raise its standard variable mortgage rate by 45 basis points, outpacing the RBA's 25-basis-point increase in the cash rate target.
Swan described Westpac's move as a "slap in the face" for its customers ahead of Christmas.
The bank pointed to higher wholesale funding costs and higher costs for customer deposits for the hike, which compared to a 37-basis-point increase by its biggest rival, Commonwealth Bank of Australia, and a 25-basis-point hike by National Australia Bank.
"All of us are going to pay more to borrow, be it banks, institutions, corporates, or business or consumers as a direct consequence of the global financial crisis and funding costs becoming so elevated," Westpac Chief Executive Gail Kelly said.
Pressures on both wholesale funding and deposits is likely to remain for some time, Hanlon told investors.
Hanlon added Sydney-based Westpac does not aim to be a price leader in the market, and has a service-led strategy as opposed to price-led.
"70% of our customers buy on service, 30% buy on price. We're focusing on the 70%," he said.
He said the group had grown home loans by twice the market average during the last twelve months, despite having a higher-than-average mortgage rate.
Still, the bank has copped a "reasonable amount" of negative feedback from customers in the wake of the move, Hanlon said.
"They don't like it...no one likes to pay more for anything...but we do take the time to explain it," Hanlon said.
"The conversations I've had normally start off with a fairly terse E-mail being sent, or a phone message that is not exactly the one you want to get first thing in the morning.. I ring the customers back, discuss it with them...I say the vast majority understand it," Hanlon said.
"To date, we've very comfortable with the responses we've been getting," he said.
The lender also said it is on track # with its integration of St. George Bank, which it acquired late last year.
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