Westpac hangs on to prized contract of NSW state banker
With few signs of credit growth among big corporate clients, institutional bankers are competing fiercely for business - including handling the transactional needs of governments.
Westpac's contract with the NSW government, which involves handling payments to 386,000 public servants and managing revenue collection such as car registration, is the biggest government banking contract in the country.
At a ceremony to mark the deal on Friday, attended by NSW Treasurer Mike Baird and Westpac chief executive Gail Kelly, the bank's institutional boss Rob Whitfield said it was eyeing further government banking contracts.
It currently holds government banking contracts in Victoria, the ACT, and New Zealand, and Mr Whitfield said it would be "actively participating" when the Queensland government's contract went out to tender next year.
Commonwealth Bank currently provides banking services to the Sunshine State's government.
Mr Whitfield said credit growth across the corporate market was "extremely benign," and competition for institutional business such as the NSW deal was "extremely strong".
"If you look at financing levels, or business credit growth, it's really still going nowhere," he said.
"That doesn't make us hungrier just for government business, it makes us hungrier for all of our customers' business, regardless of the industry sector they are in."
The NSW Labor opposition last year argued Westpac should lose the deal after it replaced workers in the state with lower-paid staff overseas. Mr Whitfield argued this was too simplistic, saying the bank was in fact creating more jobs in NSW.
The bank would not disclose the value of the contract but it has previously been estimated to be worth $40 million over five years.
Frequently Asked Questions about this Article…
Westpac renewed its contract to act as the NSW government's banker, a deal that includes handling payments to 386,000 public servants and managing revenue collection such as car registration. The agreement is described in the article as the biggest government banking contract in Australia.
Westpac did not disclose the contract's value in the article. It has previously been estimated to be worth about $40 million over five years, but the bank declined to confirm that figure.
Westpac's institutional boss said the bank is eyeing further government banking opportunities. With corporate credit growth described as 'extremely benign,' institutional bankers are competing strongly for transactional and fee-based government business as an important revenue source.
Yes. The article says Westpac currently holds government banking contracts in Victoria, the Australian Capital Territory (ACT), and New Zealand, and plans to 'actively participate' when Queensland's contract goes to tender next year.
According to Westpac's institutional boss Rob Whitfield, competition for institutional business such as the NSW deal is 'extremely strong.' The article also notes that the Commonwealth Bank currently provides banking services to the Queensland government.
Yes. The NSW Labor opposition previously argued Westpac should lose the deal after the bank replaced some workers with lower-paid staff overseas. Westpac's Rob Whitfield responded that the criticism was too simplistic and said the bank was actually creating more jobs in NSW.
The signing ceremony was attended by NSW Treasurer Mike Baird and Westpac chief executive Gail Kelly. Westpac's institutional boss Rob Whitfield also spoke about the bank's government-banking ambitions.
The article quotes Rob Whitfield saying business credit growth is 'really still going nowhere' and that financing levels are weak. For investors, that suggests banks like Westpac may focus more on stable, fee-based government contracts and other non-lending revenue streams while corporate credit demand remains muted.
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