Westpac was the first banking institution in Australian that holds a unique position in Australia. The company has been established in the year 1917 as a part of the Bank of NSW. Westpac in Australia is the first and the oldest bank. Economical and commercial performance is the most essential element of the Company. However, the organisation’s success is dependent on providing effective service that helps to reduce cost and complicacy associated with the disaster legacy centre.
The performance of Westpac can be defined by two major factors:
Considering the issues faced by Westpac it is evident that needs to take strict step to mitigate this issue by improving their banking performance. The lenders as well needs to verify the information for ensuring all the information and needs to evaluate the loan whether it is suitable for the borrowers. Westpac needs to act responsibly while ensuring the chance to repay the loans to the customers.
Westpac has been identified as the leading banking organisation in the global list 100. It has been ranked as one of the most sustainable business organisation in terms of performance and sustainability globally reported by World Economy Forum 2015. In this context, the banking organisation is engaged in offering banking and financial services to almost 13 million consumers.
The company employs nearly 36,000 people in Australia. Westpac has a total cash profit of $7,822 million and ROE return of 14.0% (refer to appendix 1). The company has an industry capitalisation of $95 billion with almost 615,000 shareholders (Westpac 2018). Considering the financial performance of the organisational they maintain a high corporate strategy. In this aspect the organisation’s strategy is to provide consistent yearly financial production:
Therefore, the company’s major objective is to measure the performance of financial transition for their Australian cooperating Bank. In this context, the report represents the overall financial objective of the Westpac Company that can be achieved through effective strategies of business and processes. Drawing from the objectives and mission of the company the report illustrates the performance of Westpac using different metrics. Finally, the report presents the definition of performance in accordance with Westpac.
II Organisational Evaluation
Westpac’s organisational objective is to deliver on the vision of the organisation by establishing deep and endurable customer relationship by sustaining the leadership within the community and by offering huge returns for their stakeholders. In delivering their business objective, the company is focused on the core markets of Australia as well as New Zealand (Mahmoud et al. 2016). In these markets, the company provides a huge range of financial offerings and services that support the financial requirements of the consumers.
By strengthening a strong position within the market the company has managed to acquire more than 13 million consumers by focusing on organic expansion and increasing the number of consumers. However, the company has achieved the leading position by developing long-term value for its customer’s employees as well as shareholders within the community. This organisational performance has been identified by their long-term interest and confirmation that these terms are in consistency with the efficiency of the resources (Sani & Maharani 2015).
Westpac has successfully implemented and adopted all the concepts if organisational, management by measuring its environmental social as well as economic parameters that are popularly called triple bottom-line report. West Bank Corporation has fulfilled all these aspects of performance by integrating the concepts of sustainable business. The supply chains of the company spend a huge amount for the indigenous Australian business with almost $1.2 million.
Apart from these, there are 67, 122 employees those who had taken part in the Westpac group financial wellbeing program of education. Westpac has investment $1.32 billion for providing support for the need of community resilience and for the development of affordable housing sector. By doing so, the organisational has helped to enhance the individuals work as well as lives by approaching society changes. Westpac is thinking creatively by providing for the underemployed group of people and evolving them with service offering.
In this context, Westpac has recognised the significant for implementing accountability in business activities that are helpful for the organisation promoting social and economic development for encouraging these activities, the senior’s managers of the company has established a code of conduct for their business partner’s including staffs and suppliers for reducing the severe impact on the environment (Van Dooren, Bouckaert & Halligan 2015).
However, the company motivates it suppliers to put a priority on their environmentally friendly products. These types of activities of organisational performance allow the banking organisation to establish effective processes and services that does not decline the quality of the organisation.
The organisational structure of Westpac consists of the strategic position including Group executives of Westpac, retail and business rankings, the CEO of the organisation, product managing for the Australian banking operation. The group of production managers are responsible for maintaining the significant progress of the banking line and wealth front line area by demonstrating cross-selling performance in the current years. The responsibility of the CEO is to manage the product and development of risk management of the customer requirements along with the online mobile operations.
III Illustrating Performance
The most important aspect of performance for Westpac is to move towards sustainability across series of areas such as social, environmental, as well as financial activities over the period of several years. Performance parameters of the organisation is based on different sustainability initiatives taken by the organisation. It is evident from the annual report for the period of almost 200 years Westpac has consistently adapted to build effective support for their customers and development of economy.
It is quite clear from the report that the organisational has been operating in a sustainable way that is deeply rooted in the business as well as culture. In this context, the major shareholders of Westpac consist of consumers, employees, community members, investors as well as suppliers (Dumay 2016).
The organisation has been successfully embracing leadership worlds that held by women reported an increase from 16 percent in the year 2015 to 48 percent in the year 2017. In addition to this, the rate of employees working flexibly increased from 63 percent in 2014 to 74 percent in the year 2017. On the contrary, for the purpose of environment issues, the organisation has raised $500 million through the Westpac climate bond. Along with it they have increased a certain proportion of renewable energy finance from 45 percent to 59 percent in the entire generation of electricity. (Chuang & Hu 2015).
The performance and sustainability report of Westpac highlighted that the company has successfully strengthened the balance sheet by carefully managing the margins and by accomplishing $263million in terms of productivity thereby growing their investment in terms and digital and service activities (Razak et al. 2017). On the contrary, the company managed to increase their customer base by almost 3 percent and has gained strong home loan with a deposit increase of 8 percent and 7 percent.
Financial performance of the organisation highlights that the company is on a steady profitable progress along with broader economy and country. The financial aspects of the company show that:
The net revenue of the company is high at 3% with a high growth with a net interest income of $15,348 million (refer to appendix 1). Again the total percentage of lending revenue increased to 8% with the rising in Australian mortgages of 8%. In this context, the Australian business lending increased to3% with the growth of SME lending activities (Westpac 2018).
The total interest margin was high at 5 points with 2.13% except for the treasury and markets. During the second half, the 3 basis points dropped in the margin reflecting the effect of high cost of fund and declining interest rate. Moreover, the expenditure of income ratio was about 42% with the expenses that is high at 3% I line with the growing revenue.
IV Justification of Performance
The company’s corporate vision is to create sustainable performance in series of areas including social, environmental and economic performance over the period of 2016. (Subramaniam et al. 2015). It was 15 years ago when Westpac set out its first sustainability strategy by outlining the organisational operations on the responsibility of conducting business. From the perspective of sustainable performance. The company has achieved milestone target with 50% of women taking part in the leadership roles.
In addition to these, they have lent $500 million through the Westpac climate issue for addressing the environmental services and approaches. By doing so, the organisation has ensured that the workforce represents a wider community where the group operates (Dumay 2016). The company has always been in a momentum for building ways to enhance sustainability challenges. In this context, it is the first bank to take part in the climatic issues that are in line with the climate associated financial disclosures.
However, the organisational has faced issues related to performance. Westpac has admitted that they are responsible for breaching lending obligations while offering home loans to the customers. Based on this, obligation they have agreed to pay a penalty of $35 million to the court. It has been found that during the period of 2011 and 2015 the banking organisation has approved automated decision of almost 260,000 home loans (Al-Musali & Ku Ismail 2015).
The organisation has raised an amount of $500 million and has delivered the first star rated bank branch for obtaining the highest rating. Along with it they expended their renewable energy proportion from 45 percent to 50 percent in total generation of electricity for the purpose of suitable development of community environment. Therefore, it is evident that Westpac is taking substantial steps to build sustainable performance to expand their business as well as to establish the community (Walker et al. 2015).
Therefore, it can be said sustainability and performance go hand in hand for the banking organisation that are consistently addressing the wellbeing of community and economic performance. They have successfully managed outgrew the objective by developing a decision-oriented culture that encourages sustainability in service. Considering the ongoing performance and the issues faced by Westpac it is evident that needs to take strict step to mitigate this issue by improving their banking performance. Westpac needs to act responsibly while ensuring the chance to repay the loans to the customers
Reference list
Al-Musali, M.A.K.M. & Ku Ismail, K.N.I., 2015. Board diversity and intellectual capital performance: The moderating role of the effectiveness of board meetings. Accounting Research Journal, vol. 28 no. 3, pp.268-283.
Chuang, C.C. & Hu, F.L., 2015 Technology strategy-innovating for the growth of ANZ Bank. International Review of Management and Business Research, vol. 4 no.3, pp.682- 700
Dumay, J., 2016. A critical reflection on the future of intellectual capital: from reporting to disclosure. Journal of Intellectual capital, vol. 17 no.1, pp.168-184.
Mahmoud, M.A., Blankson, C., Owusu-Frimpong, N., Nwankwo, S. & Trang, T.P., 2016. Market orientation, learning orientation and business performance: The mediating role of innovation. International Journal of Bank Marketing, vol. 34 no. 5, pp.623-648.
Razak, R.A., Mohammad, J. & Tobiagi, S.M., 2016. Intellectual capital disclosures practices and intellectual capital performance in Saudi Arabia financial institution. Journal of Business Studies Quarterly, vol. 7, no. 4, pp.1-10.
Sani, A. & Maharani, V., 2015. The relationship between Human Resource Management (HRM) Practices and Organizational Performance Moderated by Organizational Commitment. Australian Journal of Basic and Applied Sciences, vol. 9, no.7, pp.185-188.
Subramaniam, N., Wahyuni, D., Cooper, B.J., Leung, P. & Wines, G., 2015. Integration of carbon risks and opportunities in enterprise risk management systems: evidence from Australian firms. Journal of Cleaner Production, vol. 96, pp.407-417.
Van Dooren, W., Bouckaert, G. & Halligan, J., 2015. Performance management in the public sector. Abingdon: Routledge.
Walker, R.M., Chen, J. & Aravind, D., 2015. Management innovation and firm performance: An integration of research findings. European Management Journal, vol. 33 no.5, pp.407-422.
Westpac (2018). Home: Westpac Banking Corporation. Available at: https://www.westpac.com.au [Accessed 10/08/18]
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