Westpac & St George in merger talk

The Age this morning reveals Westpacs approach to St George for a merger, creating the largest bank in the country. The obvious link between the 2 is Gail Kelly, former StG CEO and current Westpac CEO, who revealed the plans with the following comments - ''It would create Australia's leading financial institution with regard to meeting customer needs, distribution, strong brands, scale, financial strength and the best products,'' Mrs Kelly said. ''For customers, it would make it more convenient to access customer touchpoints, including the largest distribution network with over 1,200 branches and in-stores as well as more than 2,700 ATMs. It would also provide greater diversity and choice of products from both organisations.'' Interesting times ahead, given the volatility of the financial sector in recent times - it shows the apparent strength in these 2 businesses to be talking merger - I guess Ms Kelly knows them better than most.

May 13 update - it seems its all go, with the 2 banks to make a joint announcement. Interesting analysis by Robert Gottliebson in BusinessSpectator on the new customer experience focus Gail Kelly is pushing:

"To bring out the change Kelly plans to implement at Westpac I have changed the order of some of her radical Westpac strategic aims:

• "Significantly improve the (Westpac) customer experience; Drive a strong customer culture; develop and implement compelling customer segment strategies, integrating banking and wealth;
• "Focus on being easier to deal with; transform service delivery, redesigning processes end to end"

Even her more conventional aims for Westpac are couched in customer terms. Remember that the whole focus of the Kelly strategy at St George bank was to build a better relationship with its customers than the big four banks and she attacked them with incredible vigour. Those aims show that Kelly has not changed her spots despite being in a different cage."

This renewed focus on the customer (when and why did it ever go away?) is great for our industry especially in the context of this merger - this merger must benefit customers to align with the strategic planning Kelly has brought on board.