Jason Yetton stages one of greatest comebacks in Australian banking

The fallout, including a complex remediation process, sucked up management time and, disturbingly for the bottom line, Westpac has been slipping in key areas of lending.

Most concerning, it is losing ground in mortgages. It has underinvested in its clunky technology systems. It has fallen away in servicing mortgage brokers, and has lost its lead in backing fintech start-ups. Not surprising, its stock price has underperformed.

So, taking back the gig will bring numerous challenges for Yetton. But interviews with several people who have worked with him since his re-appointment was revealed by The Australian Financial Review on Wednesday suggest he could be the man for the job.

And the prize for success could be a large one: succeeding CEO Peter King when he eventually steps down.

Yetton is continuously described as being highly ambitious, and full of self-confidence. He’s a details person, and one who is highly demanding of his staff.

“He is a strategic thinker, and he’s a lateral thinker. He is a person who gets stuff done. His attitude is one of unrelenting execution,” according to a banker who has worked closely with him over many years.

Despite the pressures he loads onto his managers – including taking on a lot of the detail himself, if he’s not satisfied with results – underlings like working with him because he shows loyalty; indeed, in the early 2010s, he was a hero in the branches, says another former colleague at the time.

“He’s an enthusiast, and gets infused by the people around him and caught up in their support. He’s a pretty optimistic person, as ego-driven people can be. He believes in what is possible.”

It’s a work style that has been forged through experience. Before he departed, Yetton didn’t want to leave Westpac. True to his inherent self-belief, he had told colleagues he was an outside candidate for the CEO gig to replace Kelly.

In reality, it was Rob Whitfield – a Westpac veteran who had helped it recover from its near-death experience in the late 1990s – or Hartzer, who had joined Westpac from Commonwealth Bank and before that ANZ, and was a seasoned retail banker.

Yetton backed Whitfield, but in late 2014, the board went with Hartzer. This triggered a falling out between Yetton and the new boss. Like Icarus, Yetton had flown too close to the sun.

But as it happened, his departure was fortuitous – given the travails that struck Westpac not long after he left.

A royal commission cleanskin, Yetton can count himself lucky that he dodged the bullets fired by the Hayne inquiry; if he was still at Westpac a few years later, he would have likely been in the witness box.

And this may have involved having to explain why Westpac was planning to put financial planners into its branches to cross-sell its wealth products – a core part of the strategy that Kelly and Yetton were attempting to drive in the retail bank. But this was later exposed as a folly, and identified by royal commissioner Kenneth Hayne as being at the heart of misaligned incentives across the industry.

Out of the limelight, he instead watched the drama unfold from small personal lender SocietyOne, where he joined as CEO in March 2016.

(As it happened, the job was secured after a rapprochement of sorts with Hartzer, who gave the nod for Yetton to join what was then a jewel in the portfolio of Reinventure Group, Westpac’s venture capital fund. Yetton was the driving force behind getting Westpac to back Reinventure in 2014; SocietyOne was its first investment. Since Hartzer’s departure, the bank’s VC strategy has been withering on the vine.)

His time in fintech-land provided many lessons. One was that it involved unrelenting hard work. Raising money for non-banks is tough. There was little support and few experienced staff, meaning Yetton had to take on more work than a group executive at a bank has to. Frustratingly, SocietyOne wasn’t ready to list on the ASX after his two-and-a-half years at the helm.

But the royal commission, ironically, provided Yetton with an opportunity to re-enter major banking. He was head-hunted by Commonwealth Bank CEO Matt Comyn to help clean up and sell CBA’s wealth operations. These had been targeted by Hayne’s findings that put the writing on the wall for banks operating sprawling wealth management operations because of conflicts of interest.

Comyn knew Yetton had deep experience in wealth management; before joining Kelly, working under Rob Coombe, Yetton, like Coombe, had been at BT Financial Group, a powerhouse in its time.

Yetton was hired by CBA in 2018 to conduct a spin-off operation. The pitch was appealing: he might end up as a CEO of a new ASX-listed company that combined Colonial First State and its global asset management business (GAM). But it wasn’t to be.

As it happened, CBA abandoned its “CFS Group” plans and sold up wealth in bits, as private equity offers for parts of the business arrived. The Japanese bought GAM, and what was left, essentially Colonial and the advice businesses, looked unappealing to Yetton given the regulatory complexities operating wealth in the post-Hayne world.

In May 2020, his Westpac comeback began. He returned to conduct a similar operation to CBA’s. He was hired by King, who had reluctantly taken over from Hartzer, to run the sales processes for Westpac’s remaining superannuation, funds management and insurance operations.

Like CBA, this was a very big job. Yetton excelled at execution; the work has mostly been completed. Merging BT’s superannuation funds with Mercer Super Trust was one of several complex deals. (King said on Thursday the division would be disbanded when Yetton moves to the retail bank, where he will replace Chris de Bruin.)

While his ability to get things done has stood out over the past few years, those that know Yetton say he has a few faults, including a tendency to think he knows more than he does, and his ability to crowd people out as he applies the blowtorch. He could learn better to delegate, some say.

He’s been working on that. A lesser known job that Yetton has also taken on during his time back at Westpac has been the dual role of head of strategy. Westpac sources say he’s been quietly building a team in the division, including experienced retail bankers such as Damien MacRae, who are ready to shift into the retail bank to help Westpac restore its broken relationships with some mortgage brokers.

Westpac is said to be poor at turning mortgage applications around, a key reason why Macquarie and ANZ have secured more loans through third parties. It has also failed to establish a standalone digital mortgage product like CBA’s Unloan, leaving it vulnerable to rapid advancements in self-distribution.

But in the early 2010s, Yetton invested a lot in mortgage broker relationships and systems. He knows the importance of third-party distribution given BT sold mostly through financial planners. There’s hope he might steady the ship, and fix up distribution as it continues to close branches.

Fiercely competitive, alongside new business banking boss Anthony Miller, Yetton will be keen to take it to CBA.

Another area of focus will be fixing the bank’s ageing core IT systems, and dealing with a bloated bureaucracy, especially around compliance. He will also need to reinvest in Westpac’s multi-brand strategy, including lifting the profile and performance of St George, which has never been fully integrated into Westpac despite the merger happening just after the GFC.

As Shirley Bassey once sang, “It’s all just a little bit of history repeating”. But Yetton will hope he can create a better future than the one that materialised after he left the job last time around. He will see himself as a candidate for King’s job – something that could become a reality if he can turn the sagging mortgage business around.