He told MPA that the move would introduce new clients to the Aussie broker channel
On the other hand, it could be the start of something big…
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Westpac could lower costs and hasten a profit turnaround by making a 45% reduction in its branch network to save $850 million over three years, analysts say.
Westpac has been reeling somewhat for much of the past year after being slapped with a record $1.3 billion penalty for millions of violations of anti-money laundering legislation, according to The Australian. The bank is facing heavy scrutiny from regulators, and has underperformed its rivals of late thanks to the missteps.
Michael Rowland, chief financial officer at Westpac, will present a strategy to get the bank back on track when its half-year results are announced on May 3.
Brendan Sproules, an analyst at Citi, told The Australian that the bank’s current cost base of $10.2 billion could be slashed to $8.3 billion by focusing on three areas: moderating risk and compliance expenditures, optimising its branch network, and sales of non-core assets.
“We think Westpac should set a 2024 cost target of $8.8 billion to account for timing and natural growth,” Sproules said.
There has been something of an epidemic of shuttered bank branches of late as digital transactions become more commonplace in the era of COVID-19. Last month, Westpac announced plans to close or amalgamate up to 48 branches across the country.
ANZ has closed or announced plans to close about a quarter of its branches since the beginning of last year, but it’s hardly the only bank that has slashed locations. Bank branches across Australia are currently closing at the fastest rate in two decades.
National Australia Bank CEO Ross McEwan said that 93% of transactions were now digital.
Read more: ANZ closing branches faster than any other major bank
Citi said that it had modeled a cost-cutting strategy that would see Westpac shrink its network of 958 branches to 518.
However, existing lease arrangements and community concern about closures mean the bank is likely to adopt a five-year plan for closures rather than shuttering branches immediately, The Australian reported.
The Financial Sector Union has staunchly opposed the trend of shuttering branches. FSU national secretary Julia Angrisano told The Australian earlier this week that mass branch closures were an effective desertion of regional communities that “does not reflect the true needs of bank customers.”
Ryan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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