Westpac hangs on to prized contract of NSW state banker
Westpac is eyeing further opportunities to sell banking services to governments, after this month renewing the lucrative contract to act as the NSW government's 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.