Westpac CEO Brian Hartzer disagrees public naming of executives involved in breaches

Westpac chief Brian Hartzer was the last executive to face the second round of questioning of the parliamentary on Wednesday. The executive spoke about his views on the proposal of recommending senior executives to be named and shamed for breaches affecting customers. The proposal required banks to report licence breaches and disciplinary consequences to the Australian Securities and Investments Commission (ASIC).

Hartzer said that Westpac supported transparency and accountability but the company disagreed on the process of reporting as it was not practical. He pointed out that there were cases of massive significant issue that should be taken into action at the time it occurred.

Commonwealth Bank and National Australia Bank (NAB) refused to support the recommendation. Commonwealth Bank chief executive Ian Narev said that public reporting of breaches occurred expeditiously. He said that such process would overtake the due process of the bank in assessing managerial responsibility and disciplinary consequences. He said that executives were entitled to due process. He suggested that disclosure of disciplinary consequences should be conducted through annual reports.

On the other hand, Shayne Elliot of ANZ said that the bank supported the principle of naming executives. However, ANZ thought that the five-day reporting period was problematic.

The Westpac executive responded to the issue raised by Liberal MP for Banks David Coleman, chair of the committee. Coleman raised that Australian Competition and Consumer Commission (ACCC) only focused on certain breaches but it did not function to examine competition across the industry as a whole. Hartzer said that the sector already felt very competitive and he said that the proposal was not necessary while clarifying that he did not object the proposal.

Westpac CEO has noted that six-monthly ACCC competition reviews would only lead to duplication as ASIC was reviewing the competition as financial system inquiry recommended. Hartzer has also answered questions about Royal Commission. He said that it would be expensive and the banking industry was already highly regulated.

In February, Westpac faced controversy as a former Westpac banker was sentenced to three years in prison. The banker was jailed because he signed up elderly customers to $4 million in loans they could not repay. The 46-year-old David St Pierre was reported to encourage 11 elderly customers to invest in a Tasmanian property development scheme by borrowing hundreds of thousands of dollars. Foreign transaction fees were also refunded by Westpac to hundreds of thousands of credit card customers. The decision was made after little information of charges was disclosed to the customers.