Rumour mill: Calm at the top masks turmoil below

Bernard Kellerman
The news Westpac's chief executive was moving on and Brian Hartzer was moving up did not meet with a great deal of surprise among industry insiders, but did garner some grudging admiration from a few people who had previously been privately and publicly critical of the bank and its leadership.

"Westpac have managed this succession very well over a number of years, since 2011," said one senior banking services provider.

"While it would have been very tempting for [Kelly] to stay until the bank's bicentenary in 2017 she has chosen the moment well, based on what the bank has said about how it arranged the succession plans."

The timing of Kelly's departure has positioned CEO-in-waiting Brian Hartzer in a good place starting from the high point of a record annual profit and top customer satisfaction rankings.

"There's not much he can do to change the way things are running for the time being, seeing as he's been a part of the revised Westpac strategy from the time he was hired," a Westpac watcher told Banking Day.

One senior colleague of Hartzer's who may feel otherwise is Rob Whitfield, head of Westpac's investment banking division.  He was allegedly told of the outcome of the board's deliberations on Monday this week and reacted by taking two days off. "Whitfield would have been on their short list, so read into that what you will," said a source who declined to be named.

Among the list of likely winners is Alex Holcomb, who moved up from general manager of the bank's institutional and corporate transactional services into the chief risk officer's role when 35-year Westpac veteran Greg Targett retired in June.

While CRO is not the type of high profile, strategic, results-oriented role that Holcomb has revelled in at Westpac, she is now one of the executive team when previously she was merely knocking on the door.

Sources have suggested the highly regarded Holcomb could find herself steering the Westpac boat through riskier waters for the next five to six years, as her predecessor did, although she will emerge on the other side still lacking the broad banking leadership experience that is usually seen as a crucial step towards securing the top job.

In the CRO role, though, Holcomb will be in a prime position to prove her real worth to the group, with the credit cycle about to enter a difficult phase.

Another clear winner amongst the cut and thrust of the c-suite and their direct reports is David Curran, seen as an inspired hire at the time he was brought in, first as a consultant, and later as CIO, to take control of Westpac's technology modernisation program.

A veteran of CBA's rip and replace approach to its core banking system upgrade, seeing him named as Westpac's CIO left some observers sceptical that Curran would be able to succeed where previous technology chiefs such as Bob McKinnon and Clive Whincup had fallen behind schedule, while burning through a $1 billion in the last half decade.

By all reports Curran has added rigidity to the process, and Westpac has confirmed in a recent update that its successor programs to the much vaunted SIPS are on track and on budget.

The same cannot be said for all of Hartzer's colleagues and direct reports. "There are potential question marks around some of them," said a source who declined to be named.

One senior executive with a large question mark in his immediate vicinity is chief operating officer John Arthur. The success of Curran and a subsequent rejigging of reporting lines to him and to others such as St George's former technology boss Dhiren Kulkarni (now CIO for Westpac's mobile banking, online, branch and call centre networks) have reduced Arthur's importance.

There are also rumours of a clash of personalities between Hartzer and Arthur that do not bode well. Insiders expect the reporting lines to be slightly flatter and simpler by February next year.

And of course, there is the question of who will score Hartzer's soon to be vacated spot as head of Westpac's retail banking operations. Readers' suggestions are welcome.

In addition to internal politics, all Australian banks and notably the Big Four banks, are about to find out what life is like under yet more stringent Basel III rules, while dealing with the domestic game-playing of a post-Murray Inquiry world.