Westpac renews lucrative NSW contract
(23 April 2013 – Australia) Westpac has renewed its lucrative contract to act as the New South Wales government’s banker and is now eyeing further opportunities to sell banking services to more governments.
The competition to handle transactional needs of governments has become fierce with few signs of credit growth among big corporate clients.
Westpac's contract with the NSW government, which involves handling payments to 386,000 public servants and managing revenue collection such as car registration, is the biggest government banking contract in the country.
At a ceremony to mark the deal last Friday, attended by NSW Treasurer Mike Baird and Westpac Chief Executive Gail Kelly, the bank's institutional boss Rob Whitfield said it was eyeing further government banking contracts.
It currently holds government banking contracts in Victoria, the ACT, New Zealand, and Whitfield said it would be 'actively participating' when the Queensland government's contract went out to tender next year.
Whitfield said credit growth across the corporate market was 'extremely benign,' and competition for institutional business such as the NSW deal was 'extremely strong'.
'If you look at financing levels, or business credit growth, it's really still going nowhere,' he said.
'That doesn't make us hungrier just for government business; it makes us hungrier for all of our customers' business, regardless of the industry sector they are in.'
The NSW Labor opposition last year argued Westpac should lose the deal after it replaced workers in the state with lower-paid staff overseas.
Whitfield argued this was too simplistic, saying the bank was in fact creating more jobs in NSW.
The bank would not disclose the value of the contract but it has previously been estimated to be worth A$40 million over five years.
Commonwealth Bank of Australia (CBA) currently provides banking services to the Queensland government.
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