Westpac 'not going anywhere' despite sale plans - chief executive

Westpac's chief executive is reassuring customers the bank is "not going anywhere" amid news the New Zealand arm of the business could be up for sale.

In a statement on Wednesday the bank said it is considering a demerger as part of its "fix, simplify and perform" strategy.

It has already "placed a number of businesses into a Specialist Business Division, for ultimate exit".

David McLean told The AM Show on Monday there's no need for customers to panic.

While there are advantages to being owned by Australia - such as financial strength - he says the bank will be in good stead going at it alone.

"We're standalone anyway...we're still going to be here [if Australia sells] because we have a very strong balance sheet."

One financial expert says a sale could be great news for the New Zealand market.

KPMG's head of banking John Kensington told Morning Report two New Zealand companies - Kiwibank and the Superannuation Fund - would likely consider buying the share, if Australia goes ahead with the sale.

"That's the exciting part, the possibility that a large new entity may come to the New Zealand sharemarket in part or in total and provide a bit more depth to what is able to be invested by New Zealanders."

McLean says nothing is set in stone - but if the deal does come to pass, it will be manageable.

"We can definitely stand on our own two feet. We'll definitely remain here under any scenario - we're a big enterprise here with lots of money."

The timeframe for the possible sale is fluid - McLean says customers can expect a decision to be made within the next couple of months, but once that decision is made it could be at least a year before any kind of change is made.

The news of the demerger came just hours after the Reserve Bank of New Zealand - Te Pūtea Matua raised concerns about Westpac's risk governance processes and told them to commission two independent reports to address them.

Westpac is New Zealand's third largest bank with more than a million customers across the country. It employs more than 4000 people.