David Ellis: My name is David Ellis. I'm Morningstar Australia's senior banking analyst based in Sydney. Today, I am joined by Mr Brian Hartzer, Westpac Banking Corporation's chief executive officer.

Good morning, Brian and thank you very much, and we appreciate your time.

Brian Hartzer: Pleased to be here.

Ellis: Congratulations on Westpac 200th year anniversary. So how do you see your role as a CEO of Australia's oldest bank and oldest company, and in particular, custodian of the institution's future.

Hartzer: Well, it's an incredible honour. And the role that Westpac or the Bank of New South Wales as it was originally known has played in this country for the last 200 years is really extraordinary. Our history is really the history of the Australian economy and we really take that to heart. There is this recognition that we are stewards of the company more than anything.

When we look back at that history, and there are not many banks in the world that are 200 years old. Let alone a new world organisation.

The lessons that are really taken from that are that we have an obligation that banks exist to support economic growth and in our case that is fundamentally why the bank was created. We were created to create a private economy in Australia, before that there was no currency. There were no banks. And the Governor at the time saw the need for a bank to support economic growth. So, we try and stay focused on the fact that our job is to support economic growth of the nation. To build long term relationships and to be willing to adapt over time to the many changes that come and go through an economy.

Ellis: Let's turn to the bank's multi-faceted responsibilities. So how do you rate the bank's long-term performance in balancing responsibilities of shareholders, customer, staff, regulators and particularly the bank's social responsibility funding the economy.

Hartzer: Well, I go back to that first point about why the bank exists. We really believe at Westpac that our fundamental purpose is to support the economic growth and sustainability of the country and our customers.

So, we think about how we run the company very much from a long-term perspective. Ironically, I think about it as being entirely consistent with shareholder value. And when I was studying and learning about how you think about value creation in the bank. One of the things that you realise very quickly is that most of the value in a bank like Westpac is about our ability to sustain returns over time. And that – so we – I like to describe our job as management as being about growing the long-term value of the company, within the constraint of acceptable returns along the way.

So, we need to maintain credibility with the markets. We need to show that we are managing the environment well year-in, year-out. But our primary obligation is to grow the customer franchise, make the business efficient, build relationships that can last the test of time. And when you start to think about that growing the value over time you realise that there is no conflict between doing the right thing for customers, doing the right thing for the community and doing the right thing for shareholders. It's actually a myth that those things are in fundamental conflict. Maybe in the short term they are, but that’s not really how you grow value in the long term.

Ellis: You mentioned when you were studying, and I understand you studied at Princeton University in the US and you've obviously worked in a number of different senior banking roles around the world. So, with your experience, what do you see differentiates Australia compared to many other countries in the world.

Hartzer: Well, Australia is a wonderful place. It's a country with vast resources, it's a country with a very welcoming and open and industrious people. And a place where innovation is appreciated. And where there is a real – I think because of the distance of getting here -- I mean anyone who's traveled to Australia knows it takes a long time to get here. But what that meant is that the business community has always been very interested in what's going on in the rest of the world.

So, this is a recognition that we're at a bit of distance. So Australian business people tend to travel a lot – Australians tend to travel a lot, as many people would know. So, over the years we've constantly been curious to learn from the US, to learn from US banking system to more recently to go to Silicon Valley and understand what's going on there. To go to the UK and see what's happening there, to look at Scandinavia, to look at Canada which is a similar market.

We've been very keen to import ideas. Not necessarily without changing them a little bit, but to be alert to the need to not be insular. And I think that’s led to a pretty vibrant financial system here and it's meant that in many respects the banks have ended up being quite innovative as well.

Ellis: Now let's turn to sustainability and Westpac is a world leader in sustainability and is ranked highly by the Dow Jones Sustainability index and Sustainalytics and other global ratings businesses. So, what do you see is the importance in that. What's the importance of embedding sustainability in Westpac's business model?

Hartzer: Well, it's been a long-term commitment of the bank. I think we had our first statement on sustainability in the early 90s. We were one of the first banks in the world and the first bank in Australia to sign the Equator Principles back in 2002. W

e've had a climate policy since 2008 and we continue to update that every three years. But we also focus on engaging with the community, support for indigenous Australian advancement. Lots of other aspects of what we think about sustainability. The philosophy really comes back to the idea that it is part of our business strategy and that we are, we see ourselves and our ability to be successful and create value in the long term as being a pillar of supporting the economic advancement of Australia.

And when you approach it in that way, you realise that a commitment to advancing the community and a commitment to healthy environment. And we have made a virtue out of recognising that broader obligation, and demonstrating we are taking long term view of our future, not just being a profit seeking company that also has a social responsibility thing that we do off on the side. What I always say to people is that at Westpac, it's part of who we are. We attract people who want to work for a company that has a long-term perspective.

Ellis: Looking at getting the Westpac message across globally. Obviously, Westpac has US listed ADRs sponsored by BNY Mellon, in New York. How do you see the role of those securities in getting the investment case across to on a wider scale to international investors?

Hartzer: Well, it’s very important and we're very proud of being the only SEC registered Australian bank in the US and that is an important piece for us. I know as an American myself that investing overseas has this kind of element of fear and concern about it and lots of people view it as very risky.

And of course, there is always currency risks that you take when you invest outside U.S. But it gives us, it forced us to a high standard of reporting and it gives us a vehicle to talk to potential investors and help them understand, actually, this is a very solid country with an incredible track record of economic growth. And we have as the oldest company in that country and as the second largest bank with a massive market share and a number one and number two position in every one of our businesses. We've got a low risk strategy. We're a very I would argue compelling long-term investment for people who are looking for a safe reliable well positioned financial services entity. We try and keep ourselves nice and simple and easy to understand and we think that access to the US market and sophisticated investors is important to us.