New chief executive wants Westpac to shed title of least-loved bank

Sunday, 14 November 2021

Westpac chief executive Catherine McGrath is one of five women chief executives of the 11 largest retail banks.

Catherine McGrath begins as chief executive of Westpac on Monday, taking the reins of a bank at the bottom of the league table of customer love.

ANZ, ASB, Bank of New Zealand and Kiwibank all have net promoter scores (NPS) in the 20s and 30s.

An NPS is the percentage of their customers who would recommend a friend join their bank, minus the percentage would who would tell their friend not to bother. Westpac’s NPS is just 14.

“Clearly the NPS for Westpac isn’t where we want it to be, and getting customers feeling they are getting the support of Westpac at its best is real focus,” says McGrath.

* Coronavirus: Billion-dollar-profit banks must show they care about NZ in bad times, Shane Jones says

* BNZ CEO Angie Mentis' pay falls to $3m

Westpac's acting chief executive Simon Power, general manager for regulatory affairs Mark Weenink, and acting general manager for institutional and business banking Andrew Bashford recorded vaccination messages that were shared with all Westpac emp

McGrath joins Westpac shortly after leaving Barclays in the UK, a bank that was still reeling from scandals when she joined it in 2013.

Westpac remains the least-loved bank in New Zealand. Chart shows the net promoter scores of the major banks. The NPS shows the proportion of customers who would recommend the bank minus the number who would not recommend the bank.

But she didn't return home to New Zealand take the Westpac job, only interviewing for the role while she was in MIQ.

“Westpac were kind, and kept me entertained with interviews,” she says.

“It’s hard being in a room 23-and-a-half hours a day with your half-hour walk in a pretty small exercise yard,” she says.

Asked to describe herself, McGrath says: “In the UK I would always start with, ‘I’m a New Zealander’, but that's not of material interest over here.”

“I invariably get described as supportive, challenging, you learn a lot working with me. I’ve got quite an irreverent sense of humour.”

Descriptions of bank chief executives often include how much they’re paid. But McGrath says she’s not 100 per cent sure what she'll earn.

“I don’t know the answer to that question off the top of my head, if I’m entirely honest. I can tell you it’s on a contract somewhere, but I don’t have the figures at my fingertips,” she says.

The fuzziness over the exact sum “reflects that I signed my contract quite a while ago,” she says.

She says a portion of her pay is linked to lifting the bank’s low NPS score.

Bank chief executive pay is revealed in the annual reports each bank submits to shareholders.

Antonia Watson, ANZ's chief executive, has presided over a big bounce in profits at the bank, which looks set to earn more than $2 billion in the current financial year.

The latest annual reports from the Australian banks which own ASB, Westpac, ANZ and BNZ, show their chief executives running between A$2.9 million (NZ$3.01m) to A$3.8m, with the figures given in Australian dollars.

In his last full year at Westpac, former chief executive David McLean earned A$1.4m.

ASB chief executive Vittoria Shortt has spoken out about how many households are struggling financially.

With McGrath now at Westpac, women occupy chief executive positions at five of the 11 main retail banks, including three of the four largest banks.

ASB has Vittoria Shortt. ANZ has Antonia Watson. TSB has Donna Cooper. HSBC has Burcu Senel.

TSB Bank chief executive Donna Cooper. Though TSB has a lower national profile than the big five banks, it is a powerhouse in Taranaki.

Together the five banks headed by women had just under $410 billion of assets at the end of June, data from the Reserve Bank Te Pūtea Matua showed.

BNZ, Kiwibank, Heartland, Co-operative bank, SBS, and Rabobank have male chief executives, and had combined assets of $170b at the end of June.

McGrath wonders if the success of women is to do with the nature of the industry.

Catherine McGrath, Westpac’s new chief executive, interviewed for the job while in MIQ.

“Banking at its best is helping people achieve all those things they want to achieve, because financing and funding and payments are what makes the world go round,” she says.

“Maybe there’s something about that that aligns with some of the people getting to the leadership of the banks at the moment.”

She hasn’t had to buy a house in Auckland on her return because she kept the one she bought a decade ago before heading to work in England. She's pleased she did.

“I did have a pause for thought that said I don’t know that I would be able to afford it now, given what’s happened to house prices in Auckland, and I’m happy that I bought almost 10 years ago now,” she says.

She wasn't familiar enough yet with government building policies to have a view on whether they would deliver the homes needed at prices ordinary people could afford.

McGrath supports the world-wide trend for banks to be held to account for poor treatment of customers.

“This trend of regulation about making sure that customers are getting the right outcome all the time is one that I’m hugely supportive of,” she says.

“Banks at their worst can be very undermining, and not helping customers, and the school of thought I’m from is, ‘how do we help people achieve what they want throughout their lifetimes’,” she says.

The support people need from their banks was brought home to her, she says, as she weathered the UK Covid lockdown based out of a branch in Clapham Junction in London because Barclays' head office was temporarily closed.

“It was a very humbling and thought-provoking year, and completely reinforced the important role that a bank has to support society and help society to thrive,” she says

It also allowed her a rare opportunity to cycle around a largely traffic-free London.

“I used to cycle up and down the Thames, and around Richmond Park,” she says.

She doesn’t yet own a bike here, but is keen get out around the country. “Some of the cycle trails New Zealand has put in are just outstanding,” she says.