It didn’t quite compare to last year’s marathon effort, but Westpac’s 2020 AGM was still full of mea culpas and promises to do better as the bank continued to grapple with the fallout from AUSTRAC (total cost: $1.3 billion) and its decision to drop the first-half dividend.
“It can be said no other way: 2020 was a disappointing year for shareholders. Many of the issues we faced were of our own doing, particularly the AUSTRAC matter. This simply should not have occurred, and I apologise genuinely on the company’s behalf,” said chairman John McFarlane.
Mr McFarlane said that a return to more consistent dividend payouts was one of his highest priorities, while noting that APRA’s regulatory requirement that ADIs not pay out more than half of statutory profits as dividends had “constrained” the bank (though certain bad decisions that led to profits themselves being materially lower could also be implicated in the reduced dividend, something chief executive Peter King acknowledged).
Mr McFarlane also refused to be drawn on whether the proceeds from the sales of the general insurance and Pacific businesses could be passed on to shareholders, saying he’d prefer to see the money in the bank or invested in a “very good business opportunity”.
And on the AUSTRAC matter, Westpac is still seeking to control the narrative. Mr McFarlane told shareholders that the bank believed the best course of action “was to reach a settlement and draw a line on this matter”. That’s despite every indication that Westpac was shaping up for a fight and had only provisioned $900 million for a fine, even as AUSTRAC continued to release more and more evidence against it.
But despite a horror year that has seen a number of key executives depart and APRA just last week warning it to lift its game, Westpac’s efforts have been rewarded. Only a small minority of shareholders voice objections to the election and re-election of directors, and the bank’s remuneration framework received a cool 97.3 per cent in favour – avoiding another embarrassing strike against it.
