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'Battle-hardened' banking heavyweight John McFarlane will become Westpac's new chairman, as former bosses depart amid scandal
John McFarlane has been named as the new Westpac chairman to replace long-serving Lindsay Maxsted.
McFarlane previously served for a decade as ANZ CEO before going to the UK and turning around British banking giant Barclays.
Westpac hopes McFarlane's experience will be enough to steer it through its current AUSTRAC scandal, which has already claimed the scalp of former CEO Brian Hartzer, for whom McFarlane will be responsible for finding a permanent replacement.
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There's a new boss at the helm of Australia's second-largest bank.
Brit John McFarlane, a former ANZ Bank CEO, has been called in to become Westpac's new chairman amid one of the big bank's darkest hours.
"Over the past 27 years he has been a main board director of five of the world’s leading financial institutions, including as executive and non-executive chairman, chief executive and executive and non-executive director roles," outgoing chairman Linsay Maxsted said in a statement issued to Business Insider Australia.
McFarlane will take over at the bank amid one of the biggest scandals in Australian banking history. It is currently being investigated by Austrac for allegedly violating anti-money laundering and counter-terrorism more than 23 million times, with suggestions it could be fined more than $1 billion -- breaking the record for the largest corporate fine in corporate Australia's history.
The fiasco – if it could be reduced to that – perhaps explains why the bank has chosen McFarlane, a 72-year-old banking veteran, to steer it through the scandal. He has after all made a name for himself as a good man in a crisis.
“Most recently, Mr McFarlane was Chairman at Barclays in London, which after the global financial crisis underwent a decade of challenge. During his four years as Chairman, the company was streamlined, repositioned and has sustainably returned to profit. Prior to this, he delivered a successful turnaround program at UK insurer Aviva, a company similar in scale to Westpac," Maxsted said.
He's also served as the chairman of the United Kingdom's peak financial services body, TheCityUK, and directed and chaired the Australian Bankers' Association, on top of his tenure at the head of ANZ. In other words, McFarlane's the kind of heavyweight crisis banker who Westpac needs right now.
Interestingly, before he's even started in the job he's already suggested he won't be sticking around for long. McFarlane has indicated he was coming back from the UK to enjoy a well-earned retirement.
"People close to me know that on my return to Australia, I hadn’t intended to take another major leadership role. However, I’m passionate about the Australian banking sector, and I’m excited by the challenge of returning Westpac to its place as a leading global bank, following recent events," he said in the statement.
"To some extent, the internal and external challenges ahead for Westpac are not dissimilar to those in my last five financial institutions, and I have therefore grown comfortable about my capacity to work with the Board and management to effect the necessary change. Nevertheless, I’m sufficiently battle-hardened to realise things can be tougher than you think and that in banking, nothing is ever certain."
It's certainly not. Just a few short months ago, the continued tenure of the bank's former CEO Brian Hartzer and chairman looked all but assured. Now, they're both through -- or very almost through – the exit and interim CEO Peter King has replaced Hartzer.
McFarlane will have a much longer-lasting impact on the bank than his possible two-year tenure would suggest. He will handpick the new Westpac CEO to replace King as well as hold some sway over his own successor.
Less than 12 months ago, a similar fate befell NAB's top two men, former CEO Andrew Thorburn and chair Ken Henry, after Kenneth Hayne spectacularly singled the two out by name – and only those two – in his final royal commission report. Interestingly, it was Ross McEwan, another UK crisis banker with a Scottish surname, who eventually replaced Thorburn.
Must be something in the water.
