News: WBC Westpac chairman apologises for share slide, says to start CEO succession planning

Westpac Banking Corp (WBC) Chairman John McFarlane on Monday apologised "unreservedly" to shareholders for a sharp decline in its share price and said the bank would begin making succession plans for its chief executive.

Westpac shares have tumbled some 20% since Nov. 1 when it reported big drops in margins and high expenses. That triggered cuts to earnings forecasts by analysts and forced the lender to offer more attractive terms than planned for a A$3.5 billion share buyback.

"Overall, the result was disappointing, leading to a drop in our market value for which I apologise unreservedly on behalf of the board," McFarlane said as shareholders expressed their frustation with the bank's performance at its online annual general meeting.

He noted the bank was planning to reduce costs materially "without jeopardising investment in infrastructure and revenue opportunities."

Westpac's performance has led to speculation in domestic media that Chief Executive Peter King, formerly the bank's CFO before taking the helm in April 2020, might not last much longer in his job.

Responding to a question from a shareholder, McFarlane also said Westpac would begin making CEO succession plans, but added King had only been recently appointed and the planning was "probably a little premature".

"We were going to consider it this calendar year, but we decided it wasn't the time and definitely something will begin next year. It's very important with CEO succession to develop internal successors. And in fact, it's one of the things that we've been doing, and this is a very important responsibility for the board," he said.

Westpac has become the smallest of Australia's Big Four lenders by market value, losing its long-held No.2 ranking, also hit by declines in market share.

"This hurts okay," McFarlane said. "It's not the right position for Westpac. Traditionally with our business mix, we've always expected Westpac to sit around the number two position. And so it is true that in a number of ways the company hasn't been performing."