Westpac share price: what’s the outlook following fiery AGM?
We examine some of the highlights from Westpac’s Annual General Meeting – including the shareholder reaction, comments from acting-CEO Peter King and the outcomes from a number of key resolutions.
Things got relatively combative during Westpac’s Annual General Meeting (AGM), held last Thursday, December 12.
In the wake of news that Westpac had allegedly breached the AML/CTF Act around 23 million times – with a number of these breaches involving child exploitation – it’s hardly surprising that the bank’s AGM had such an atmosphere.
‘Sack the board!’, ‘Just go, Maxsted! Just go!’ and ‘We’re certainly not paying peanuts, and we’re still getting monkeys’, were just some of the comments hurled at Westpac’s Board, according to the Sydney Morning Herald.
Consequently, the Westpac (ASX: WBC) share price fell 1.2% on the day of the AGM; though it rallied during Friday’s session – gaining 1.6% – to finish out the week at $24.480 per share.
Westpac share price: is confidence coming back?
Acting-CEO Peter King spent much of his AGM speech speaking about how the bank was planning on moving forward – on fixing past mistakes – both culturally and strategically.
For one, the bank has already closed the products related to AUSTRAC’s IFTI claims, noted Mr King.
‘We’ve changed our processes will continue to review them. We have also implemented additional transaction monitoring.’
Bolstering a force of already 750 professionals, the bank is also going on a hiring spree with the aim of recruiting an additional 200 compliance and financial crime specialists.
Mr King finally noted that Westpac has established a Financial Crime Committee – with the aim of reviewing the bank’s current systems and ‘provid[ing] additional scrutiny and challenge over our enhanced financial crime program.’
The Westpac share price opened 0.9% higher today, with the ASX 200 rising more than 50 points before 11:00 AEDT.
The FY20 outlook
Commenting on the bank’s FY20 outlook, Mr King noted that conditions are expected to remain soft and growth hard to come by. Historically low rates – which invariably impact bank margins – were also flagged as a key concern.
'While this environment will continue to drag on performance in the 2020 year, we should see some balance sheet growth without significant deterioration in credit quality. However, there will be extra costs as we work through the remaining regulatory issues,’ said Mr King.
AGM: a weighing or voting machine?
Bar the re-election of Ewen Crouch (which was withdrawn prior to last week’s AGM); in the end Westpac faced little impediment electing and re-electing its directors.
Nerida Caesar and Peter Marriott were both re-elected, passed as an ordinary resolution.
Steven Harker and Margaret Seale were both elected as Directors, again, passed as an ordinary resolution.
Moreover, though the adoption of Westpac’s renumeration report was passed by an ordinary resolution – given that more than 25% of the votes were cast against this resolution (64.10% FOR to 35.90% AGAINST) – under the Corporations Act the bank was forced to put forward a ‘Conditional Spill Resolution.’
The ‘Conditional Spill Resolution’ was not passed though – receiving only 8.74% FOR votes.
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