Westpac CEO Peter King and Carolyn McCann, Westpac's group executive, customer and corporate services, fronted House of Representatives Standing Committee on Economics yesterday.
King, in his opening statement, offered updates on three key areas: the outlook for the Australian economy, how customers are managing cost of living challenges, and the significant steps his bank is taking against scams.
As with CBA's contribution earlier in the day, Westpac seems to have a positive view Australia's economic outlook
"The resilience of the economy is mirrored in our customer base. As an example, total loan stress has increased to 1.4 per cent but is lower than expected, while more than 78 per cent of mortgage customers are ahead on their repayments," King told the Committee.
He contrasted this with the around 19,000 customers in hardship arrangements. "For context, we have more than 3.1 million customers with a debt product – so this represents about 0.6 per cent of customers we lend to, in hardship."
King also explained that Westpac has spent an estimated $100 million on scam prevention measures over the past two years, with customer scam losses down over 30 per cent year on year.
"In particular, the decision to block transactions to some digital currency exchanges has been a major contributor to bringing down these losses," King said.
"Unfortunately, digital platforms and social media companies are still missing in action when it comes to the fight against scams. The Australian Financial Crimes Exchange estimates that 40 per cent of all scams originate from these platforms."
King and McCann fielded a range of questions from the assembled MPs, including a barrage from deputy chair, Garth Hamilton, who took issue with Westpac's electric and hybrid car loan being priced at 5.99 per cent per annum, below a standard car loan of about 6.5 to 13 per cent.
Hamilton was surprised to find these loans were not cross subsidised, but were "sharply priced", so went on another angry tangent, railing at Westpac for offering a discount – "in a cost of living crisis – to people who can afford a Rolls-Royce but not a discount to people who need a Hilux".
He was equally underwhelmed to hear that Westpac was looking to wind down its financing of gas production – in line with well understood proposals to reduce emissions by 2030. "The other part is a national energy security policy – that if there is issues with our energy security and the government asks us, we will consider finance there as well."
The Westpac executives were also involved in a lengthy discussion on the application of least cost routing, international credit card schemes (ie, Visa and Mastercard) and the use of cash. The bank's view is that cash is more expensive than digital, although the cost of paying with cash is borne by the bank and the merchants.
Chief executives from NAB and ANZ are expected in Canberra today to offer their views on the economy, scams, and measures they have been taking to help their customers deal with the current cost of living crisis.