Australia should expect a lower growth environment for some time to come, Westpac's chief executive said.
Gail Kelly said Europe's best-case scenario was a decade of low growth and the fallout would reach Australia, where consumers were already cautious.
"We're moving into a very different world than we were in pre-GFC [global financial crisis]," she told an analyst briefing yesterday.
"There are some big seismic structural shifts coming through the sector. We are adapting to those."
Kelly said the banking industry's capital, liquidity and funding requirements were changing as were its regulatory requirements.
"We're in a deleveraging world. One of the impacts of what's occurring in Europe is even the best-case scenario in Europe means we're in for a decade of low growth.
"Here in Australia, too, we've got cautious consumers and I think we should all expect that we're going to be in a lower growth environment for some period to come."
As a result, Westpac was fundamentally reshaping its balance sheet to suit the times.
"We are fundamentally reshifting our balance sheet to deal with this environment, and our productivity agenda goes specifically to deal with this agenda as well," Kelly said in comments delivered as part of a first-quarter update.
She said bank branches would always have an important role at Westpac but the way consumers used them was changing.
"Over time, the shape of a branch network will change, no doubt about that. We'll be working on that between and the next five years to make sure we get that right," she said.
Kelly said branches would be smaller and would employ fewer tellers.
"People in branches will be different. You can see in our Westpac local [branch network] that we're moving down that path already - higher skilled people, bank managers, advisers," she said.
"This is the nature of the work that we're doing. We are reshaping our business fundamentally to suit the times."
