Westpac halts offshore move

Westpac chief executive Gail Kelly says the bank will not replace any more local staff with workers in cheaper countries this year, despite the bank receiving an "efficiency dividend" from its overseas operations.

After a recent wave of sending jobs offshore in the financial services sector, Mrs Kelly defended the practice on Thursday, saying it allowed the bank to provide better services at lower cost.

Despite these benefits, she said Westpac would focus on adjusting to the moves it had already announced.

"For this year, we are embedding what we've got under way," she said in Sydney.

Westpac sent 565 jobs offshore last year and a further 142 in the opening months of this year, according to figures from the Finance Sector Union. The industry has sent more than 1700 positions overseas during this time, the union said.

The comments came as ANZ Bank became the latest lender to cut its workforce in, making 50 positions redundant in its international and institutional banking division.

Most of the cuts, which were a response to weak conditions in the sector, will affect workers in Sydney and Melbourne.

The Commonwealth Bank is the only lender among the big four that has not sent some of its positions offshore, and it argues this gives it an edge over its rivals in customer service.

Mrs Kelly, who visited Westpac's operations in India last month, defended the practice by saying it had allowed the bank to work with "world class" companies such as IBM and given it access to highly skilled workers.

"The strategy is not about cost arbitrage, the strategy is about skill enhancement," she said.

But she conceded sending jobs offshore had led to lower information technology costs. "There's obviously an efficiency dividend, but there's a quality dividend as well."

Mrs Kelly, nominated as one of the most powerful women in the world by Forbes, made the comments at a lunch with Westpac executives and journalists to mark International Women's Day.

The intense public focus on lifting the number of women on corporate boards had been effective, she said, but the bigger task was lifting the share of women in senior management positions within companies, something Westpac is targeting.

She also cautioned against gender quotas.