SYDNEY - [AAP] Westpac (ASX: WBC) chairman Lindsay Maxsted says criticism of the Australian banking sector is "warranted" but hopes a royal commission into alleged misconduct will restore trust and confidence.

Mr Maxsted told the lender's annual general meeting in Sydney on Friday that the board was "disappointed" at the deterioration of the banking sector's reputation but accepted there had been times when the industry had failed to meet customer expectations.

He said that while Westpac previously had argued that inquiries into the sector are unnecessary, the recently announced royal commission would ultimately restore trust, respect and confidence in Australia's financial system.

"As a bank, and as an industry, we also underestimated the intensity of community, regulatory and government reaction when these expectations have not been met," Mr Maxsted said.

"The board and management at Westpac understand we must proactively respond to these concerns and lift our standards to an even higher level--and we are."

Chief executive Brian Hartzer said the royal commission would give the bank the opportunity to tell "our story".

"Banks have been a political football for too long," Mr Hartzer told the AGM.

"We are embracing the Royal Commission as a way to finally draw a line in the sand on calls for inquiries."

The chief executive said while the inquiry may uncover issues across the industry, he hopes it will show that Westpac is working to fix past issues as they arise.

The lender also revealed it will leave its dividend unchanged at 94 cents per share, despite the impact of the government's bank levy, which cost Westpac $66 million in 2017 and is expected to rise to $284 million in 2018.

 

AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.