The Westpac Banking Corp (ASX: WBC) share price is trading lower on the day of its annual general meeting.
At the time of writing, the banking giant’s shares are down 0.5% to $19.89.
What did Westpac say at its annual general meeting?
At the meeting the bank provided investors with a summary of its performance in FY 2020 and its targets for the future.
Speaking about FY 2020, Westpac’s Chief Executive Officer, Peter King, revealed that he was disappointed with the company’s performance.
He said: “The 2020 financial year was clearly disappointing, with reported profit down 66%. Much of the fall was due to our own issues, including the AUSTRAC penalty. COVID directly impacted us contributing to slower loan growth, lower margins, higher expenses, and a material increase in impairment charges.”
The Chief Executive also touched on the AUSTRAC matter, which weighed heavily on both its performance and the bank’s priorities over the last 12 months.
Mr King commented: “Shareholders are rightly disappointed. This simply should not have happened, and I apologise. I also recognise that the civil penalty and the impact of COVID resulted in lower dividends and this made it hard for many of you.”
“While our failings were not intentional, significant changes and consequences have occurred. This included Board and management changes along with remuneration consequences for those in the chain of responsibility. I and the Executive team also took collective accountability with 2020 short-term variable rewards cancelled,” he added.
Westpac has been encouraged by the quick economic recovery since the height of the pandemic and expects it to continue in 2021.
Though, Mr King acknowledges that not all of the bank’s customers will recover as quickly.
“The Government’s support has played a critical role in helping Australian families and keeping businesses afloat and we expect the economic recovery to continue through next year. Nevertheless, some customers will find conditions difficult. The gradual unwinding of Government support must be offset by increased activity if we are to minimise the impacts on customers,” he commented.
The Chief Executive concluded by confirming the bank’s aim to simplify its business and create value for shareholders.
He said: “At the same time, we are working hard to resolve our issues and simplify the business. We are underway but have much more to do. As CEO, my role is to build sustainable long-term value for shareholders, and I am personally committed to see this through.”
“Shareholder value is created by a strong customer franchise; strong relationships; and by being there for customers when they need us. Right now, that means supporting customers and the economy through this pandemic,” Mr King concluded.