TERRY Budge has already passed the halfway mark in his seven-year contract as the head of BankWest, outliving the average Australian chief executive’s tenure in the process.
TERRY Budge has already passed the halfway mark in his seven-year contract as the head of BankWest, outliving the average Australian chief executive’s tenure in the process.
But the banking game is different from the rest of industry.
Bankers last far longer than the boss in any other major sector of the economy – possibly due to the strict regulation of the industry, but more likely based on the fact that Australia’s chief lenders are very profitable operations which hardly made a mistake since the calamity on the 1980s which almost brought down Westpac.
It is the sort of stability of tenure which allows someone like Mr Budge almost four years grace to collect his thoughts and unroll a strategy which he believes will be the key test of his period in office among the BankWest tower’s upper reaches.
This week, Mr Budge unveiled a major restructuring of the bank, concentrating resources in a two-pronged focus on consumer and business banking.
The aim of the game remains the east coast, where the bank is already well placed after a regional diversification, particularly in the business side of the operation where BankWest believes its experience in small business will help it carve a niche.
Mr Budge said the current wave of change was the most dramatic since he took over the business – far outreaching the restructuring of about 18 months ago when at least two of his divisional heads were dumped from the bank.
“This is far deeper and more significant than the first,” he said.
“This has gone far more deeply into changing the organisation structure.”
“In the first one we said there was an opportunity in the east and WA to grow our business further, let’s move out and explore those opportunities.”
“We have done that and achieved some successes.”
“Where we are now is we know there are opportunities – we have to put the pedal down harder.”
Under the new structure, ecommerce expert Chris Whitehead has emerged as head of consumer solutions, one of the two key positions from five executives reporting directly to Mr Budge.
Mr Whitehead has had a swift rise to the top. Five months after joining BankWest from Adelaide Bank, an Internet banking leader at the time, he was made chief information officer during the last major wave of change at the bank, in December 1998.
Peter Jackson has been appointed head of business solutions, putting the executive back into his comfort zone of business banking after two years of running the WA operation.
Another executive, Tony Ianello, will be moved from the customer-orientated corporate financial services to drive the head office function supporting the other divisions.
Mr Budge denied the structure, which gave more authority to the divisional heads – particularly consumer and business solutions – but also increased accountability was a way of establishing a testing ground for his successor.
“That is up to the board, he said.”
“I don’t think anyone is set up these days as a natural successor. It depends on the circumstances of the organisation and runs on the board.”
However, Mr Budge was open to the prospect of one major change in the second half of his tenure at the top – an acquisition.
Focused on organic growth, he acknowledges the bank has failed to ignite investment markets despite strong revenue gains and good profitability. Instead, the shares have moved largely on the basis of takeover speculation, with BankWest seen as the target if its parent, Bank of Scotland, should offload its majority stake.
BankWest is not out to make a purchase for the sake of it, but Mr Budge said that the growth strategy set out this week could deliver the market share gains in the east coast to make a purchase a viable proposition within the next three years.
“Acquisitions are about strategy, opportunity and price. You have to have the strategy right for a start. You have to have the opportunity which fits your strategy, then it comes down to price,” he said.
“Generally, prices that have been required for acquisitions in Australian banking have been very high.”
Mr Budge said to date the synergies had not been there for such a move by BankWest, but he admits that could, quite possibly change, if all goes to plan.
But the banking game is different from the rest of industry.
Bankers last far longer than the boss in any other major sector of the economy – possibly due to the strict regulation of the industry, but more likely based on the fact that Australia’s chief lenders are very profitable operations which hardly made a mistake since the calamity on the 1980s which almost brought down Westpac.
It is the sort of stability of tenure which allows someone like Mr Budge almost four years grace to collect his thoughts and unroll a strategy which he believes will be the key test of his period in office among the BankWest tower’s upper reaches.
This week, Mr Budge unveiled a major restructuring of the bank, concentrating resources in a two-pronged focus on consumer and business banking.
The aim of the game remains the east coast, where the bank is already well placed after a regional diversification, particularly in the business side of the operation where BankWest believes its experience in small business will help it carve a niche.
Mr Budge said the current wave of change was the most dramatic since he took over the business – far outreaching the restructuring of about 18 months ago when at least two of his divisional heads were dumped from the bank.
“This is far deeper and more significant than the first,” he said.
“This has gone far more deeply into changing the organisation structure.”
“In the first one we said there was an opportunity in the east and WA to grow our business further, let’s move out and explore those opportunities.”
“We have done that and achieved some successes.”
“Where we are now is we know there are opportunities – we have to put the pedal down harder.”
Under the new structure, ecommerce expert Chris Whitehead has emerged as head of consumer solutions, one of the two key positions from five executives reporting directly to Mr Budge.
Mr Whitehead has had a swift rise to the top. Five months after joining BankWest from Adelaide Bank, an Internet banking leader at the time, he was made chief information officer during the last major wave of change at the bank, in December 1998.
Peter Jackson has been appointed head of business solutions, putting the executive back into his comfort zone of business banking after two years of running the WA operation.
Another executive, Tony Ianello, will be moved from the customer-orientated corporate financial services to drive the head office function supporting the other divisions.
Mr Budge denied the structure, which gave more authority to the divisional heads – particularly consumer and business solutions – but also increased accountability was a way of establishing a testing ground for his successor.
“That is up to the board, he said.”
“I don’t think anyone is set up these days as a natural successor. It depends on the circumstances of the organisation and runs on the board.”
However, Mr Budge was open to the prospect of one major change in the second half of his tenure at the top – an acquisition.
Focused on organic growth, he acknowledges the bank has failed to ignite investment markets despite strong revenue gains and good profitability. Instead, the shares have moved largely on the basis of takeover speculation, with BankWest seen as the target if its parent, Bank of Scotland, should offload its majority stake.
BankWest is not out to make a purchase for the sake of it, but Mr Budge said that the growth strategy set out this week could deliver the market share gains in the east coast to make a purchase a viable proposition within the next three years.
“Acquisitions are about strategy, opportunity and price. You have to have the strategy right for a start. You have to have the opportunity which fits your strategy, then it comes down to price,” he said.
“Generally, prices that have been required for acquisitions in Australian banking have been very high.”
Mr Budge said to date the synergies had not been there for such a move by BankWest, but he admits that could, quite possibly change, if all goes to plan.