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Last updated: November 27, 2012 2:18 pm
Gail Kelly, a rare female among the ranks of top bankers, is on a mission. As head of Westpac, Australia’s number two bank by market value, for the past five years, she has already boosted the proportion of women managers significantly.
But there is more to be done. Over the next five years Ms Kelly wants to see to it that half of her 4,000 or so managers are women. “In 2007 the proportion was 32 per cent, now it is 40 per cent. By 2017-2018 I want to see it at 50 per cent,” she says.
Ms Kelly is no man-hating feminist, but insists that a better equilibrium between the sexes is good for business. In particular, she says Westpac has become a magnet for the best female talent in banking.
Sexism in Australia – and the fightback against it – has become a hot topic in recent months, highlighted last month by prime minister Julia Gillard when she lambasted opposition leader Tony Abbott and Speaker of the House Peter Slipper over misogynistic comments.
However, Ms Kelly does not support a top-down quota system for women in top jobs, as advocated by some European policy makers. “No, you need to start at each organisation from the bottom up, building a pipeline, changing the culture,” she says.
She is particularly proud of the bank’s record in seeing 98 per cent of women staff who go off on maternity leave subsequently return to work.
Ms Kelly – a South African mother of four who built her career at Nedbank before moving to Australia – was speaking shortly after Westpac delivered another solid year of profits. Return on equity for the year to the end of September topped 15 per cent, a top-of-the-range aspiration for many European and US banks.
“Our bottom line is reflecting our heavy lifting over the past five years for the first time,” Ms Kelly says. In particular, the benefits of the group’s acquisition of rival St George were now showing through, she says, with the cost-income ratio down to a market-beating 40.8 per cent.
Funding remains expensive, she admitted, with the effect magnified by the cut-throat competition for customer deposits as a means to reduce the reliance on wholesale funding markets.
Westpac has a loan-to-deposit ratio of close to 150 per cent but is now expanding deposits at a rate of 12 per cent versus 4 per cent credit growth, even though wholesale funding today is cheaper than deposits.
“If another Lehman were to happen or the eurozone crisis should deepen and markets start to freeze up, you don’t want to find yourself in an uncomfortable funding position,” Ms Kelly says.
Deposit rates in Australia today top 5 per cent, 1 to 2 percentage points higher than typical wholesale funding costs.
The push is also aimed at complying with the stable funding requirements of the Basel III global rule book.
Ms Kelly said Westpac was clearly benefiting from the retrenchment of many global operators from trade finance, debt capital markets and foreign exchange.
But she maintains a highly cautious approach to the idea of Asian expansion. The region contributes just A$100m of revenue out of a global total of A$18bn, in stark contrast to rival ANZ, which has built out across the region aggressively. “There’s so much opportunity within Australia,” she says.
So will she be around to see the fruits of the current strategy, particularly the drive for a 50-50 split of men-to-women in management? She will not be drawn explicitly, but suggests not. “Five years sounds like an awfully long time.”
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