Westpac boss optimistic

Westpac PNG Ltd recently appointed Adrian Hughes its managing director to replace Geoff Toone. Business reporter Gedion Timothy recently had a chat with him on his new posting.

TIMOTHY:  Congratulations on your appointment. Tell us about yourself.
HUGHES: I’m a second generation banker so I’ve got banking in my blood. I’m an accountant by training and recently graduated from the Institute of Company Directors. Personally, I like cycling, I play the guitar and I am a keen scuba diver. So I’d like to take the opportunity to dive while I’m here in PNG. I’m also keen on trekking and I trekked to the Everest Base Camp earlier this year. My last job was as general manager of Westpac Fiji. Before that I was Regional General Manager in Commercial and Retail banking segments at Westpac. I spent the past four years working in the Pacific so I have a good understanding of the region. But I am very new to PNG and will be taking a lot of time to understand the local market, the people, culture and tradition. That’s something I’m really looking forward to.
TIMOTHY: Have you worked in PNG before?
HUGHES: No, although last June I spent a week here with the then managing director of Westpac PNG Geoff Toone. I spent time in Port Moresby meeting clients who have business interests in both Fiji and Port Moresby. That was really valuable. I also had the opportunity to visit Lae and Mount Hagen which was amazing and very worthwhile.
TIMOTHY: Give us an overview of Westpac operations around the world.  Tell us about the bank.
HUGHES: Westpac is Australia’s oldest bank – in fact, Australia’s first company. In PNG, Westpac was also the first bank having established operations in 1910.  Importantly, next year the Westpac Group celebrates its 200th anniversary which will be a huge event. I know our staff and customers are looking forward to that milestone and can’t wait for the celebrations to happen at Westpac Group offices and branches right across the world. Westpac’s representation is global. We are in Australia, New Zealand, the Northern Hemisphere, Asia and of course the Pacific (in PNG and Fiji). We employ about 40,000 people which includes around 500 in PNG with the majority being PNG nationals. In PNG, we have over 300,000 customers who bank with us. We have 15 branches across the country. And in addition to the retail branch network, we have corporate and business banking capability, and a financial markets transaction solutions team. Westpac Group’s vision is to be one of the world’s greatest service companies, helping our customers, people and communities to prosper and grow. And finally, something we are very proud of is that Westpac is recognised as a global leader for sustainability. This year we were again named as the most sustainable bank globally in the Dow Jones Sustainability survey, which is a very big achievement.
TIMOTHY: How many years have you been in the banking industry? And from that experience, what do you plan in your new role as managing director of Westpac PNG?
HUGHES: I’m a career banker and I’ve been at Westpac for over 35 years now. I started as a teller working in regional New South Wales and worked my way up the corporate ladder from there. My early duties were as a mail boy, making cups of coffee for the boss. I’ve mainly worked in customer facing roles and spent time in commercial, retail and business banking. I have been in senior leadership for around 15 years and I have learned a lot during that time. Particularly in terms of leadership, the most important lesson for me has been the importance of taking the time to spend time with and listen to your team members and take them along with you on the journey. Other lessons I’ve learned is to be very clear when setting expectations, and then follow that up with a disciplined approach to measuring performance. To me, that means having performance discussions regularly and giving balanced feedback and rewarding people for doing good work. And also providing a safe place for people to come to work, which is very important in PNG.
A big lesson I picked up in Fiji was the importance of understanding your place in the country. When you look at my role here in PNG, I’m still very much a visitor. I’ve been here now for only a couple of months so I have a lot to learn. Before making any major decisions, I’ll be spending a lot of time to speak to the staff about what’s important, and what needs to be done. I’ll of course also be sharing, because I’ve been around banking for a while now, so hopefully together as a team we can make Westpac PNG a better place.
TIMOTHY: How do you compare the banking industry in PNG to other countries where Westpac is based?
HUGHES: I’ve worked in three jurisdictions and from my experience, the banking sector here is good and competitive, even though there are less banks than other countries I have worked in. The banking sector here is profitable and importantly, it’s well regulated. It’s good to see the sector has grown and developed in recent years, and that it is well managed.  These are the most important things for economic stability and growth.
TIMOTHY: What is the task here you wish to prioritise and get it done while at the helm in PNG?
HUGHES: My most important task is to find quality time to spend with the staff. We did a staff perspective survey earlier in the year where all staff in Westpac PNG had the opportunity to comment on the things that needed to be done or changed. A whole lot of people told us that we need to do more training, provide better career progression and workplace safety, and also provide more avenues for people to speak up about the things that they think are important. So those will be my biggest priorities.
TIMOTHY: Serving the needs of the customers in any business is the integral part to it. How do you see this in relating to serving your customers in Papua New Guinea?
HUGHES: A good question as it gets to the core of the issue, as meeting customer and community needs are core to the business of banking. What this means to me is understanding what the customers’ expressed – and sometimes unexpressed – needs are and meeting them. And of course this can be really tricky. A good example is a common request for a new bank account which sounds simple but is not. A good bank, and certainly Westpac PNG, will take time to talk to the customer and find out why they need the account, what it will be used for, and more. This is what we call a needs-based conversation to determine what account or product best suits the customer. That way, the end result is a satisfied customer, and hopefully a long term customer. I spoke previously about 2017 being a year with great focus on training for staff at Westpac PNG, and a lot of the training will be to help people have these conversations with customers. Banks are of course here to provide a service, and to provide advice, and Westpac’s staff need and want to be equipped with the skills they need to deliver excellence on both of these fronts.
TIMOTHY: On the PNG economy, the Government handed down its 2017 budget against a backdrop of weakening global commodity prices. What is the bank’s view on the current state of the PNG economy and how are you planning for the future based on your forecast?
HUGHES: Of course, I’ve only been in PNG for a short time so my views are not that well developed. What I will say is that I was interested to read the PM’s address at the Mining and Petroleum conference in Sydney recently, where he spoke directly about the rough patch the country’s going through right now due to the lower commodity prices and other factors.  Westpac’s forecast for the next 12 months takes into account the current conditions and challenges. We’ve been in PNG a long time and we’ve lived through the economic highs and lows. Our plans for 2017 include some major investments. We’ve recently done a major upgrade of our core banking system, which improves the experience for both customers and staff, and we’ll also have some improved or new products coming up in 2017.
TIMOTHY: Some say PNG’s economic development has been at the back of the extractive industry.  Many have called for the widening of the economic base so that the economy can remain competent during the slump in metal and petroleum prices. How do you see it?
HUGHES: From what I’ve seen so far, there are many opportunities for diversifying the economic base in PNG. One of the potential growth sectors is, of course, tourism which would be a chance to showcase PNG’s many natural gifts to the world. PNG is such a stunning country. And when you add to this the fascinating history, it has unlimited tourism potential. I know that there are a number of developments in the tourism sector taking place now and I’m looking forward to seeing PNG growing as a destination. TIMOTHY: The recent launching of the SME Policy by the Government aims to create 500,000 jobs by 2030. What roles does Westpac plan to play in this?
HUGHES: Westpac is partnering with the government on this very important initiative and very pleased to be playing a part. SME is an incredibly important part of the economy, and therefore banks have an important role to play in supporting this sector. For us, it is about providing the right products, the right bankers and the right education to help SME owners build and grow sustainable businesses that will create jobs and boost the economy for the long term. We have lots of knowledge and good training programmes that help people understand how to start and build a business, and we will be working with government to get this information to the right people, so we can help build the SME sector.
TIMOTHY: What improvements do you want to see in the policies governing the banking industry in PNG, in particular the regulatory and legislative environment?
HUGHES: As I’ve only been in PNG a short time, it’s really too early to me to speak on policies – either positive policies or improvements needed. But I will say that I think regular dialogue between regulators and the commercial banking sector at all levels is essential, and I’ll be looking forward to working with the Bank of PNG. I can also say that I am keen to see, and to be part of creating a re-energised banking association to better represent the sector’s views. I would also really like to see a cross pollination of skills and experience between commercial banks and banking regulator.
TIMOTHY: The supply of forex has been very topical in recent times. How is the Westpac managing the situation?
HUGHES: Yes, it is a cycle and of course there is light at the end of the tunnel. But  it is the number one issue for many of our customers at the moment. I’m fast learning that PNG is an export-dependent developing country of considerable natural assets and its economy is therefore very sensitive to fluctuating commodity prices. It’s Westpac’s role to support customers through good times and tough times – and given we’ve been in PNG for more than 105 years we completely understand the challenges faced by businesses at this time and we’re here to support them. The foreign exchange situation in PNG is very serious and we are seeing evidence of some of our business customers having operational issues because of the Forex shortage. I know that everyone is doing what they can to bring some much needed foreign exchange to the market and provide relief to affected businesses during this very difficult period. Westpac continues to work closely with the Bank of PNG and customers, to ensure that all orders for foreign currency have the required supporting documentation, so as to minimise delays.
The shortage is symptomatic of the significant growth of the PNG economy in recent years – with import demand growing faster than our ability to diversify our sources of export income.  So, we’re going through the cycle and Westpac’s view – similar to others who do business in PNG – is that towards the end of next year and into 2018 we will see an improvement in commodity prices and alongside it an improvement in currency flows.