Westpac Bank Criticized for Favoring Electric Vehicle Owners with Lower Interest Rates

Westpac, one of Australia’s largest banks, has come under fire for its lending policy that favors electric vehicle (EV) owners. Liberal MP Garth Hamilton criticized the bank during a recent inquiry hearing, questioning why EV owners were offered lower interest rates compared to standard car loans. Hamilton argued that this policy was out of touch with the current cost of living crisis and favored those who could afford luxury vehicles like Rolls Royces. He stated that the bank should be offering discounts to people who need more affordable vehicles like Hilux.

In response, Westpac CEO Peter King defended the bank’s EV loan program, stating that while it was not explicitly an environmental, social, and governance (ESG) product, the bank recognized the importance of addressing climate change. King acknowledged that the uptake of EV loans was slower than expected due to the lack of charging stations, which hindered the transition to electric vehicles. However, he emphasized that Westpac was committed to supporting this transition for the benefit of the country and the economy over time.

Despite King’s explanation, Hamilton maintained that the EV loans were out of touch with the concerns of most people, particularly during the current cost of living crisis. He argued that the bank should prioritize addressing the financial struggles faced by the majority of the population. In response, King highlighted that Westpac’s main focus was on mortgages, which accounted for two-thirds of the bank’s loan book. The bank had been competing to offer lower interest rates to homebuyers in response to recent interest rate hikes, demonstrating their commitment to addressing the cost of living crisis.

The discussion also touched on the closure of bank branches, a trend driven by the increasing use of digital banking services. King acknowledged that branch networks were being used less frequently, with 96 percent of transactions being conducted virtually. However, he emphasized the importance of maintaining a balance between digital banking and in-person services for customers who preferred the latter. King stated that Westpac would continue to maintain branches in regional areas until 2027 to accommodate customers who relied on physical banking.

To adapt to changing customer demands, Westpac has implemented measures such as a virtual banking team that provides services through video calls. Despite the shift towards digitalization, King emphasized the importance of bank branches, noting that cash was still being widely used in many communities across Australia. He acknowledged that some people did not have access to the digital economy and relied on cash transactions. King emphasized the bank’s role in helping people safely enter the digital economy as the economy as a whole was becoming increasingly digitized.

In conclusion, Westpac’s lending policy favoring EV owners has sparked criticism from Liberal MP Garth Hamilton. The bank’s CEO, Peter King, defended the policy, stating that it was driven by the recognition of the importance of addressing climate change. However, Hamilton argued that the focus should be on addressing the cost of living crisis and providing support to those in need. The discussion also touched on the closure of bank branches, with King highlighting the importance of finding a balance between digital banking and in-person services to accommodate the diverse needs of customers.