Michael Evans in BusinessDay:
Westpac customers, and even the Prime Minister, Kevin Rudd, are now picking apart the bank and its image-conscious boss - who was once carried into a St George staff Christmas party dressed as Cleopatra sitting on a throne. And to think things were going so well.
Tuesday, December 1 marked the first anniversary of the completion of the Kelly-led merger between Westpac and her old bank St George that turned Westpac into a powerhouse. Mrs Kelly, known to answer customer complaint emails personally, and her retail banking chief, Peter Hanlon, hit the branches to sell her mantra ''delight the customer''.
When the Reserve Bank raised interest rates by 25 basis points, Westpac was ready, pressing the button soon after on a 45-basis-point move. The big four banks baulked. Handsome profit is one thing, overt greed is another. The Treasurer, Wayne Swan, said it was a ''cynical'' move without justification.
Wednesday: ANZ, NAB and the Commonwealth were largely expected to march to Mrs Kelly's fast-step move. There is silence. Talkback radio starts to murmur...
Thursday: Mrs Kelly's week takes a turn for the worse. The NAB boss, Cameron Clyne, undercuts Westpac, matching the RBA's 25 basis point rise, politely suggesting to Westpac customers they might like to pay him a visit. Still, the week has a bright moment. Mrs Kelly reportedly receives her annual cash bonus of $2.6 million.
Friday: CBA and ANZ raise rates over and above the RBA but largely avoid criticism as they are below Westpac. CBA's Sir Ralph Norris, who once wrote a reference for Mrs Kelly to get the job running St George, says he feels home owners' pain.
Sunday: Competition boss Graeme Samuel sheepishly admits he would think twice if asked again about whether Westpac and St George should be allowed to merge.
Monday: Mrs Kelly makes her first comment, telling investors her ''ambition is to delight customers and earn all their business'' . Asked if she has misread the political and customer response, Mrs Kelly says: ''No, I don't think so,'' adding that ''no customer'' would lose their home because of Westpac's rise. ''[The politicians] can see the evidence before them that funding costs have gone up materially,'' she said (See, Wednesday.)
Tuesday: Mrs Kelly quietly moves Mr Hanlon, the chap in charge of retail banking who helped put up the rate rise, into human resources. Instead of dropping the spade, Kelly keeps digging.
The bank tries to explain its decision, sending thousands of customers an email comparing mortgages to banana smoothies and likening the cost of borrowing money to the cost of bananas.
Wednesday: Customers, aware of the lack of competition in the banking sector, revolt as per the smh.com.au website: ''Money talks, BS walks. Take your loans to another organisation.''
Like an annoyed parent, Mr Rudd, who lent the Government's gold-star rating to the major banks during the crisis, tells Westpac to take ''a long hard look at itself''.
But Mrs Kelly is having no thoughts about changing her mind on the rate rise.
Dialogue with Canberra remains open.