Australia’s big banking group Westpac Banking Corp [ASX:WBC] held its company AGM this morning, which included Chairman John McFarlane notifying shareholders of his intention retire by the end of next year.
The group’s Director Peter Marriott is also to retire — from today — having completed his maximum three terms.
WBC shares have risen 12.5% in the last full year, while National Australia Bank [ASX:NAB] is up more than 8% and Commonwealth Bank of Australia [ASX:CBA] has moved upwards more than 9% in the last 12 months.
Yet Australia and New Zealand Banking Group [ASX:ANZ] has fallen around 11.5% in the year.
Source: TradingView
Westpac’s chair and director to depart
Today, John McFarlane declared that he will be leaving the group at the end of next year, angling for the bank’s 2023 AGM.
McFarlane said this decision came after his ‘turning around’ the company, and deliverance on commitments to shareholders as promised back in 2020.
The chairman reflected the timing means the Board will have sufficient time to find a replacement — a process which has already begun — with focus on identifying a new chair and directors that can enhance the existing board. McFarlane stated:
‘In the meantime, there remains much to be done and I can assure shareholders of my commitment to see the job through this year, and to support the Company in what will invariably be a challenging year.’
McFarlane wished to express the company has managed to reach a ‘good strategic and financial shape’ after undergoing two and half years of repositioning and restructuring, lowering cost base and risk.
Through the year the company’s Board has reduced, along with a streamlined committee structure and a lowering of Director numbers, as well as cost cutting in committee fees.
At the AGM it was also announced that company Director Peter Marriott has now retired from the Board, affective from today. Marriot has completed the maximum three terms in his contracted role.
Westpac’s operations and outlook
In 2022, Westpac announced the end of nine out of eleven businesses while also selling seven. The company is currently working on the exit of two of its last businesses it intends to conclude.
The bank has also streamlined its international network into four locations — New York, London, Singapore — and is soon to open in Frankfurt.
Recently Westpac pulled out of takeover discussions with payments solutions business Tyro, after executing due diligence and the company’s Board deciding the transaction would not be of optimal benefits to its shareholders.
The group had suffered a slipping market position within its portfolio over the past years, however, more recently the group has managed to stabilise its operations and perform in line with big bank competitors.
WBC’s statutory profit was up 4% over the year to $5.7 billion, despite the loss of $1.1 billion on the sale of the Australian Life Insurance business.
The group’s net interest margin was lower than 2021, weighed down by ultra-low interest rates. However, margins increased in the second half due to the benefit of higher interest rates.
Westpac’s CEO Peter King informed shareholders that the combination of rising interest rates and increased cost of living will be felt more fully by consumers and businesses after Christmas.
Top five retirement-worthy stocks
With inflation in Australia having hit its highest in twenty years, a comfy retirement seems a far-fetched dream.
Markets have been rallying, thinking the end might be near in sight — but the Fed is looking to remain hawkish a little while yet.
Inflation is lingering, and while it’s here it’s also whittling-down savings and making the ‘nest egg’ concept seem laughable.
Are there any stocks that can face up to volatile financial cycles such as these?
Our Editorial Director of The Daily Reckoning Australia, Greg Canavan says yes, certain dividend stocks.
Greg has found five dividend stocks that could outperform in today’s hostile market — suggesting a steady income to retire on.
Learn more here.
Regards,
Mahlia Stewart,
For Money Morning
