Westpac shareholders seize the day

Westpac chairman Leon Davis addresses the packed AGM at Auckland's Carlton Hotel. He hinted at a bigger dividend next year. Picture / Dean Purcell

For the first time in its 187-year history, Westpac held its annual meeting in New Zealand and Kiwi shareholders took full advantage of the chance to grill the board.

They raised topics ranging from remuneration and the size of the dividend to the Australian bank's wrangling with the New Zealand taxman.

One shareholder asked: "Could you do something a little bit better for our pockets in 2005?"

Chairman Leon Davis batted down the queries, hinting at an increase next year and promising the shareholder his concerns would be addressed.

The argument with New Zealand's Inland Revenue Department could land the bank with a tax bill of $647 million for a series of transactions dating back to 1999, but Davis insisted these were all above board.

Westpac had done "everything commercially reasonable to ensure that the transactions were not contrary with the legalities or the spirit of New Zealand tax law".

Two employees invited to address the packed meeting said they were proud to work for the bank but staff were "dissatisfied" and unachievable targets were damaging morale.

Chief executive David Morgan said leading and managing the workforce was "crucial". He said three-quarters of employees felt they had a "clear sense of direction".

Meanwhile, Westpac reiterated disappointment at the Reserve Bank of New Zealand's demand that it locally incorporate its operations in New Zealand. The Reserve Bank says this would help to avoid significant damage to the financial system should the bank fail.

Westpac said incorporation might take some time but it expected that the cost would not materially affect net earnings.

Morgan reiterated his forecast for "strong" 2005 earnings. "We are in line with our plan for the first two months of the 2005 financial year."

Westpac is the best performer of Australia's four biggest bank stocks this year, having risen almost 19 per cent, more than double the 8.8 per cent gain in the eight-member S&P/ASX 200 Banks Index.

Profit this year rose 16 per cent to a record A$2.54 billion ($2.7 billion).