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Summary
- Impressed by the performance of CEO Peter King, Westpac board has removed his two-year term and amended his employment contract with standard 12 months’ notice period.
- The board acknowledges Peter king’s valuable contribution and strategic reset towards the bank, which has started to drive a fundamental change.
- Recently, Westpac also reached an agreement to settle two US class actions, namely, US Rosen Law Firm Class Action and US BBSW Class Action.
On 30 October 2020, Westpac Banking Corporation (ASX/NZX:WBC) released a statement, extending the employment contract of CEO Peter King by termination the existing tenure of two years.
Peter King, in a recent discussion with Westpac board including Chairman John McFarlane, confirmed his commitment for a multi-year plan to turn the company around. After accounting for all the considerations, the employment contract has been modified to a standard 12-month notice period for the CEO of Australia’s second-largest bank.
The board acknowledges Peter King’s valuable contribution
John McFarlane acknowledged Peter King’s valuable contribution to the bank in a year of unprecedented change, including his contribution in guiding Westpac to sail through the challenging times of COVID-19. Settling the Australian Transaction Reports and Analysis Centre (AUSTRAC) matter was also acknowledged.
The board lauds Peter King's strategy reset as it is has already started to drive the fundamental change to how the company operates. Clear accountability, focus on improving risk management, and faster decision making is clearly in sight. The executive team has also been refreshed and the bank has been refocused on its core market products.
Peter King is also happy with his performance over the last six months and is determined to take Westpac to the leadership position.
Westpac reaches an agreement to settle two class actions
US BBSW Class Action
Yesterday, Westpac announced that it had entered into an agreement with the Plaintiffs to settle the US BBSW class action which was filed against the bank in August 2016 in the US District Court for the Southern District of New York. This class action was filed in relation to trading activity in the Australian bank bill swap reference rate (BBSW) market.
However, the terms of the agreement have been kept confidential by the company.
US Rosen Law Firm Class Action
Westpac in another agreement with Plaintiffs plans to settle the claim which was filed in the US District Court for the District of Oregon in January 2020. The class action was regarding market disclosure issues connected to Westpac’s financial crime obligations over the period of 11 November 2015 to 19 November 2019.
The settlement is subject to court approval.
Stock Performance
ASX price Update: Westpac share price has shown some recovery from the March 2020 low of $13.47, which is also its 52-week low. However, at a current market price of $18.07 (as at 3:57 PM AEDT), the price is still far away from 52-week high of $28.78.
Since June, the stock has been consolidating in a range of $20.19 - $16 without any directional trend. The one-year return of the stock is negative 35.1%, while YTD return stands at negative 25.2%.
NZX Price update: The stock closed at NZ$19.1 on 30 October, inched up by 0.26% also ending its three days losing streak. The last five months’ trend has been sideways with the range of $21.85 – $17.30. The last one-year return has been -38.1% and YTD return stands at -24.9%.
