Westpac

About Westpac

Background to Westpac beginnings.

Governor Lachlan Macquarie arrived in Sydney at the end of 1809, to become the fifth governor of the British Colony of New South Wales. In hindsight the colony's survival was amazing. Those who arrived with the First Fleet in 1788, had only two years provisions with them and no knowledge of farming in Australian conditions, and they nearly starved to death.

Added to these problems of everyday survival was the lack of a stable monetary system. Rum, promissory notes, British Treasury bills, foreign coins and barter substituted for cash; and confusion, corruption and graft had become the order of the day.

To end this confusion, in February 1817 Governor Macquarie signed a charter of incorporation establishing the 'Bank of New South Wales' and Australia's very first financial institution was born. Westpac's first President and Chairman of the Board was Macquarie's Secretary, John Thomas Campbell, and the list of the first Directors and shareholders included names that are synonymous with early colonial history, such as D'Arcy Wentworth and William Redfern.

Westpac First Premises

The first employee to be engaged by the Bank of New South Wales was Joseph Hyde Potts, who, as a 'porter and servant' was placed on wages of a weekly ration from the King's stores and an annual salary of 25 pounds.

The Bank opened its doors for business on 8 April 1817 (although a deposit had been made three days earlier) in premises it leased in Macquarie Place, Sydney, from Mary Reibey an ex-convict turned business-woman.

Early challenges

The 1820s were a challenging time, beginning with a serious loss in 1821 when it was discovered that the Bank of NSW's Chief Cashier, Francis Williams, had stolen half its subscribed capital, none of which was ever recovered.

There was criticism for not doing enough to assist the expansion of the colony, particularly lending to landowners. Although it had lent in mortgages from the beginning, this lending function was not directly mentioned in the Bank's charter and the practice would have been limited, because of the uncertainty of the status of the land titles offered as security.

The Bank also suffered the taunts of Macquarie's political enemies, mainly free settlers, who did not agree with his reformist practice of placing emancipist convicts in positions of authority. Bank Director William Redfern had been transported for his role in the mutiny of the North Sea Fleet at the Nore anchorage in 1797, whilst his fellow Director D'arcy Wentworth was tried twice, although acquitted, for highway robbery.

Many other ex-convicts, like Mary Reibey, were shareholders. The Bank of New South Wales was thus nicknamed disparagingly by some as 'the convicts bank', although 'supported by the farmers, merchants, shop keepers, mariners, soap-boilers, tanners, butchers, bakers, gardeners, cedar-gatherers and craft builders of the Colony' it also acquired the more popular title of the 'people's bank'.

In 1826, a rival bank (The Bank of Australia) was established to provide competition. By 1843 this rival had collapsed (along with many others during the banking crisis of the 1840s), a victim of over-lending. The Bank of New South Wales continued, thanks to the trust and confidence of its customers and the community, and the integrity of consistent financial discipline in its management.
Pioneering spirit - the 1850's to 1860's

Having opened its very first branch at Moreton Bay (Brisbane) on 14 November 1850, the Bank's major expansion began in response to the 'gold fever' that prevailed after gold was discovered in New South Wales and Victoria in 1851. The Bank grasped every opportunity to spread its network and consolidate its position, setting up agencies and gold-buying agents on every new diggings in response to the needs of miners and merchants. It had grown from a single office in Sydney in 1850, to a network of 37 branches in Australia and New Zealand by 1861. This success was testament to its consistent commitment to meeting the needs of the expanding communities, and to the trust and confidence it enjoyed.
The 'people's bank' became the 'pioneer bank', and the pioneering spirit of young bank officers was truly tested. Natural elements taunted prospectors and bank officers alike. Urged on by their superiors to be the first to a new location to set up a branch or gold-buying agency, bank officers operated from premises which were sometimes no more than a tent or a bark and hessian hut.

Even a branch as primitive as a tent lent stability to the rough-and-ready goldfields, and earned the respect of the diggers, as one observer noted:
'…rough and rowdy as a new diggings may appear to those who have visited a new rush for the first time, a most remarkable confidence and trust is reposed in the banking establishment by men who would not trust even their mates with their hard-earned gold'.

The confidence and trust enjoyed by the Bank in these remote areas was not only a reflection of its reputation, but of the qualities of honesty, integrity, and commitment, displayed by the staff.

In many of these places, tents and bark huts eventually gave way to impressive, architecturally designed premises, with their solid respectability reflecting that of the Bank.

The Bank & the World Wars

Few events have played a more important role in the culture of Australian life and that of its near neighbour, New Zealand, than the two world wars of the 20th century. The legends of the ANZACs (Australian and New Zealand Army Corps) have grown out of these wars, and in each, the Bank of NSW and its future partner, The Commercial Bank of Australia(CBA), had a proud role to play.

When Australians fought in World War I, the Government relied on volunteers to serve their country and from the first, the staff of both banks eagerly answered the call. Of the Bank of NSW's 1,950 male staff, 793 enlisted, resulting in a loss of 130 lives. Of the 319 men who enlisted from the smaller Commercial Bank of Australia, 51 were killed.

During World War II enlistment amongst bank staff was again high. From the Bank of NSW 3,330 men (some 71% of male staff ) joined up and of those, 284 lost their lives. From the CBA some 980 staff enlisted with the loss of 53 lives.

The Bank, in recognition of their fighting spirit and concern for the welfare of its staff, paid supplementary wages to all serving in the armed forces and pensions were paid to the widows and families of those who did not return.

The Great Depression & Westpac's role

The Crash of the New York stock market on 'Black Thursday', 24 October 1929 may signal the start of the depression in the international sense, but the first significant sign of the onset of depression in Australia came in January of that year, the month in which Alfred Charles Davidson became general manager. The failure of a new commonwealth loan-raising in London, combined with sharp falls in the prices of wool and wheat and the fall in export prices by 50%, began a severe financial crisis.

But Alfred Charles Davidson's courageous and far-sighted approach to expand the Bank, played an important part in its future success and Australia's recovery from the Depression. Davidson's advocacy of a bold initiative to adjust the exchange rate on London downwards from par to £A130 = £100stg in 1931, helped soften the impact of the world depression on Australia and spark the ailing economy into recovery.

How Westpac got its name

When The Bank of New South Wales merged with the Victorian-based Commercial Bank of Australia Ltd in 1982, it continued a pattern of expansion by merger which had begun in 1927.

The result was twofold. The Bank changed its name to Westpac Banking Corporation, and by its increase in size, consolidated its position as Australia's biggest banking group.

A change of name for the Bank of New South Wales had been under consideration for some time, but it was no simple matter. In 1850 the Bank had been incorporated as a corporation under its own 'Bank of New South Wales Act' of the New South Wales Parliament. This meant that the Bank operated under legislation separate from companies legislation. A proposal for amendment was presented to the New South Wales Legislative Council, and although an earlier request had been denied, permission was eventually granted in the form of the Bank of New South Wales (Change of Name) Act 1982.

The new name of Westpac, a shortened form of Western Pacific, more truly reflected its prominent place in this region than the original name. At the same time, it allowed the retention of the use of the very recognisable red "W" of the 'Wales'.

Although it relinquished its old name on 1st October 1982, Westpac did not relinquish its historic traditions and values which had served it so well.

Westpac now

Since its inception the bank and Australia have been partners in progress. Westpac has a proud role in supporting the community and fully accepts their responsibility to fulfil the wider corporate social responsibilities.

Together Westpac and the nation have prospered in the good times and worked through the bad. From the time of its establishment, the Bank and community have supported each other. At times the Bank has had to restructure its organisation and consolidate its position, but it has never shut its doors. From establishing branches where no towns existed, or meeting the challenge of increasing competition in the 1990s, Westpac has been a pioneer and a participant, and the tradition continues. Established in 1817 as Governor Macquarie's 'Great Colonial Undertaking', it continues to embody the values and traditions which have served it so well throughout its history: integrity, trust and confidence, commitment to customers employees and the community, and leadership through innovation.

Company profile

A brief overview of Westpac Banking Corporation

Westpac began trading on 8 April, 1817 as the Bank of New South Wales with a single office in Macquarie Place, Sydney, in the then British colony of New South Wales. Westpac changed their name in 1982. Find out more about Westpac's proud history
Westpac have branches and affiliates throughout the Pacific region and maintain offices in key financial centres around the world.

As at 30 September 2005 the Westpac Group employed approximately 27,000 people (full time equivalents) in Australia, New Zealand and around the world.
As at 30 September 2005, Westpac Banking Corporation had global assets of $260 billion.

Westpac is ranked in the top 10 listed companies by market capitalisation on the Australian Stock Exchange Limited (ASX).

For the full year to 30 September 2005, the Westpac Group's net profit after income tax was $2,818 million.

About 266,000 people and institutions in Australia and overseas are shareholders in Westpac.

Westpac concentrates its activities in Australia, New Zealand and the near Pacific. Westpac merged with Challenge Bank in Western Australia in 1995, Trust Bank New Zealand in 1996, and Bank of Melbourne in Victoria in 1997.

Westpac's operations comprise five key areas of business, through which Westpac serve around 8.3 million customers. These five business areas are:

Business and Consumer Banking includes deposit taking, transaction accounts, credit cards and other lending. Westpac are a major home loan provider and also meet the finance needs of small to medium-sized business customers with a turnover of around $100 million. Investment, superannuation and general and life insurance products are also sold through the branch network.

Wealth Management comprises asset accumulation, investment management and life insurance operations in Australia and New Zealand. Wealth Management designs, manufactures and services financial products to enable customers to build, manage and protect their wealth. These products include managed investments (mutual funds), superannuation (pensions), life insurance, income protection, discount securities broking, margin lending, client portfolio administration (Wrap) platforms and portfolio management and administration of corporate superannuation. Westpac also provide custody and settlement services to institutional customers and fund managers.

Westpac Institutional Bank (WIB) provides financial services to the corporate and institutional customer base, assisting and advising in the management of cash, funding, capital and market risk for companies and institutions in Australia and New Zealand.

New Zealand Retail provides a full range of retail and commercial services to customers throughout New Zealand. It is the leading provider of banking services to small to medium business and is the banker of the New Zealand government.
Pacific Banking provides a full range of deposit, loan, transaction account and international trade facilities to personal and business customers.

Westpac Home Loans