Furious cost-cutting continues to define Westpac, apparently setting up the bank for a new era. “We’re now entering a new strategic phase, repositioning the group’s priorities to focus on the future,” Peter King, the bank’s CEO declared yesterday, introducing the bank’s March 2023 half-year results. “This includes placing customer care at the heart, being easy to do business with, providing expert solutions and tools, and advocating for positive change,” he said. “The progress we have made sees us in a position to increase our growth aspirations over time in key markets such as business lending, while managing downside economic scenarios. “Despite high inflation and continued regulatory demands, we’ve reduced our cost base further and brought our expense to income ratio down to 45.9 per cent. This is a good achievement and reflects more than A$1 billion in savings since FY2020,” he said. The bank said that in the future, “we’ll shift our focus from an absolute expense target to improving the expense to income ratio relative to peers.  “We’re making this change due to expected continuing inflation pressure, ongoing and new risk and regulatory requirements, and our focus on growth.”  This represents yet another step in dumping the bank’s always implausible cost savings target of $8 billion announced in 2021. The bank, however, is moving ahead on elements of its cost savings plan, and has so far achieved “more than $1 billion in savings,” King said. The bank closed 66 branches over the last year, reducing its branch footprint to 666. Westpac said it has also closed 50 co-located branches, another way of saying it is winding back branch numbers for its St George, Bank of Melbourne and BankSA brands. The bank appears to be bracing for the worst, though there is nothing special about its provisioning coverage. What is special, and pessimistic, are the updated economic forecasts shared by Westpac in its results. The bank sees unemployment hitting 5.0 per cent by the end of 2024. Credit growth will halve to 3.5 per cent next year. Weathering the tough times ahead will soon be the responsibility of a new Westpac CEO. Promoted from CFO to managing director in early 2020 (at the beginning of the pandemic), Peter King is presumed to be planning his exit around the end of the year.