Kelly's personal brand has at times overshadowed that of her own bank.
IT WAS after a series of back-to-back profit briefings with investors across two states, that Gail Kelly - master of the polished presentation - suffered a rare moment of being caught short of a word.
"I think I may have been talked out," the Westpac chief executive told one briefing.
It was a lighter moment and clearly, with Westpac's first-half profit of $3.2 billion tucked away, the pressure was off - for now.
While earnings were up slightly from the same time last year, drums were starting to beat from a disappointing first quarter. Investors don't like disappointments from the $60 billion Westpac, a bank that has been renowned for its conservatism for the past two decades.
Kelly, whose personal brand has at times overshadowed her own bank, has been stepping up appearances.
She has been crossing the country holding meetings with staff. Tough as nails, smart, charming and energetic, she has also been in the headlines calling for business to cool down in its sometimes poisonous relations with Canberra.
Change is coming at Westpac that will introduce a new dynamic at the top. Next month, banking wunderkind Brian Hartzer steps into the role of running all Westpac's Australian retail-focused businesses. This, in effect, replicates the position Hartzer had when he was at ANZ three years ago.
Hartzer had been the preferred internal candidate to take charge at ANZ, but the board under then ANZ chairman Charles Goode opted for Asia-focused HSBC banker Mike Smith.
Hartzer, a savvy marketer, spied an opportunity in one of the toughest retail banking jobs going - turning around the financial crisis-stricken Royal Bank of Scotland's retail network in Britain.
Now it's time for him to come home. Kelly maintains she hand-picked Hartzer for the role and bypassed the traditional executive headhunters. She says she wanted the "best executive in the world" to run Westpac's retail businesses, allowing her to switch her attention to drive productivity and important technology upgrades through the bank.
Analysts and fund managers widely believe Hartzer's appointment to a position overseeing two-thirds of Westpac's profit effectively anoints him to take charge from Kelly.
"It's a matter of when, not if," says a senior banking analyst. "They are the lowest-growing bank in Australia on most measures. Hartzer was the guy that was looked at ANZ as doing a great job. He is the obvious one to take over."
The analyst declined to be named because of his desire to maintain relations with the bank.
Kelly, though, says she is not going anywhere.
"I am so determined to take this company to a leadership position," she tells the BusinessDay.
"I'm into my fifth year at Westpac. I'm on to an agenda and that agenda is not complete. I've spoken about the second phase of this work and I'm fully engaged in that."
The overhaul of technology and streamlining of the business is a three-year task.
"We're into that at the moment and I'd very much like to see that through. That will take it to seven years," she says.
The fallout from Harzter's appointment is already being felt in the Australian market, with one of Commonwealth Bank's most senior executives, Ross McEwan, being named this week as Hartzer's replacement in Britain.
It is perhaps no coincidence that McEwan, who ran CBA's flagship and well-regarded retail bank, was also one of two internal candidates to replace former CBA chief executive Ralph Norris.
In terms of raw shareholder performance, Kelly's Westpac has come in at the middle of the pack over the past four years. Its shares have fallen 14 per cent over this period, compared with a flat performance by CBA, an 11 per cent fall at ANZ and a 29 per cent dip by National Australia Bank.
But bank stocks have clearly re-rated downwards since the global financial crisis. On the measure of total shareholder returns, which include dividends, Westpac comes in at 9 per cent, behind CBA at a hefty 33 per cent and slightly behind ANZ's 13 per cent. NAB's returns have remained negative over this period.
Kelly's time will be marked by her brazen $15 billion acquisition of her former bank, St George. However, the allure of the acquisition has faded, with the demands of running a bank shifting to funding over lending. Even St George's profits have waned in recent times as lending growth has come under pressure.
This is a source of frustration for the 55-year-old Kelly, who had personally transformed St George into a fiery lender to the point where Westpac was prepared to pay a high price for the sake of the smaller bank's lending momentum.
Even so, she insists the acquisition will prove its deeper value to the Westpac group. "An in-market transformational merger of this sort is something that, once you evaluate it, you will see the benefits for years to come," she says.
She points to the targets outlined in the original business case - cost savings, improved market share and improved productivity - of a bigger bank all being met. This came as the financial crisis forced St George to sharply curb higher-risk loans such as commercial property lending.
"The real benefit in my view is yet to come'' she says. ''And I can say that because what we've done so well with the St George merger is retain the customers and we've retained the strength of the franchise. There's no doubt we want to pick up from a growth point of view. I think the scene is now set for a growth agenda in St George."
After St George, Kelly's Westpac tenure will be increasingly defined by her multi-brand strategy. Some have quipped that Westpac is starting to resemble the consumer goods giant Unilever, given it now sells loans and deposits under more than half a dozen brands.
This can get confusing for some inside the bank, with Westpac running simultaneous brands from St George to BankSA to RAMS as well as the flagship Westpac retail brand.
The model has been criticised for being better suited to a faster-growing retail banking market, but Kelly argues critics are missing the point. She says it allows the bank to increase its share of the market in a low-growth environment. The brands give her levers to attack segments of the market that Westpac would not normally be able to get a look into.
Much of the focus has been on the ambitious Bank of Melbourne experiment, which reports through St George. Rebadged from St George in Victoria, the bank is on an ambitious rollout, recently opening its 50th branch. It is early days but Bank of Melbourne has lifted customer numbers by 7 per cent in the past six months, outpacing growth in the broader market.
As if to drive home a point, Kelly used Bank of Melbourne as a battering ram against rival NAB's mortgage discounting efforts. In the recent round of mortgage rate cuts, Bank of Melbourne issued the deepest cuts of all the banks, lowering its variable rate to 6.99 per cent.
While Westpac's flagship brand still has the highest mortgage pricing of the big four banks at 7.09 per cent, the Bank of Melbourne move had Kelly's imprint on it. It was a calculated decision to take the fight to NAB in the bank's home market.
So what type of bank does Kelly see Westpac becoming at the end of her seven years?
"We'd have our multi-brands up and running, all of them and firing. So we'd have evidence, clear and across-the-board evidence of the success of having a range of brands that are operating in this economy.''
That means Westpac will be able to win more customers and drive more revenue from its customer relationships, she says. In addition, Westpac will be "head and shoulders" above others in wealth management.
"We'd have a superior revenue profile as a consequence of that and a return on equity that's on an improving trajectory from today."
Kelly acknowledges it has not been smooth sailing. Her darkest moments so far include the period of December 2009 where the bank stoked a ferocious political and customer firestorm when it pushed through nearly double a 25-basis point Reserve Bank interest rate rise. In doing so, Westpac badly misjudged the mood on mortgages, trying to explain pricing by comparing it to input costs involved selling a "banana smoothie".
"There was no doubt we could and should have implemented it better,'' she says ''There's no doubt about that at all. We were out there with a lot of things going on, which means we were in the public firing line and we got swamped.
"We didn't handle it well, we didn't communicate it well, we weren't really as front-footed enough. We didn't anticipate the negativity of the response and there were too many things going on at once.
"It was a great learning curve. But was it the right call? It was definitely the right call."
Running Westpac has clearly been Kelly's biggest career challenge.
It has also been a role she had steadily been working towards since turning her back on a teaching career and taking on a job as a teller in the suburban Johannesburg branch of a South African bank more than three decades ago.
Before joining St George, she earned her stripes in the male-dominated world of Australian banking, working under the sometimes abrasive David Murray in a senior but low-profile retail role at CBA.
Here, her outlook as an Australian banker was forged just as banks such as CBA were learning the lessons of how damaging branch closures of the 1990s and cuts in customer service had been for their franchise.
She then moved to St George at the start of 2002, and found the bank was small enough to effectively project a friendly customer image. Customers at St George knew they were always just a few steps away from Kelly. And Kelly was known in the industry for her habit of telephoning St George customers, big or small, just to build relationships.
The touches worked, helping St George make inroads, even though the lender was never at the leading edge on pricing or distribution.
It was this retail energy that former Westpac chairman Ted Evans was looking for when Kelly took charge. It also seems to be the same quality the bank hopes to tap with Hartzer.
Kelly says steering the big bank through the economic turmoil of the GFC has made her a different person from when she was running St George.
"I think I'm frankly a much better leader now than when I was five years ago. And certainly than when I was 10 years ago.''
This does not mean she has put her St George past behind her. Running that bank gave her the crucial experience of being a chief executive, with duties ranging from dealing with competing demands of investors, the media, customers and even the pressures of the boardroom.
Few executives have this chance when they step into a bigger role. It is the X-factor that cannot be taught in top-level management schools or learnt through running a line business in a bank.
"I was comfortable with what it meant to be accountable at that level because it's a big difference between being an executive and a CEO,'' Kelly says.
"One never quite realises it until you are there. There's a lot of weight that sits on your shoulders.
"Moving into Westpac, I remember I was moving into a much bigger organisation, but also moving in at a time when the world was becoming a much more difficult place. It was the outset of the global financial crisis."
So far, Kelly's tenure at Westpac has been overshadowed by the raging financial crisis and demands from regulators to respond to the global turmoil. This has meant her immediate plans for the business have often taken a back seat.
"The benefit was that because I had been a CEO already, I didn't have to learn what that meant but I did have to learn what it meant to run a business - a higher-profile business - in a very changing world, and so I had to pedal very hard," she says.
"These last four years have been extraordinary. When you look back and to think 'I was there at the time'. The challenges have meant we've all had to learn what it is to be successful in a very different world.
"But I've loved it as well and I'm loving it."