WESTPAC closed down the Bank of Melbourne brand in 2004 because after years of neglect a review had found the brand was near death. Some staff in Bank of Melbourne branches were already wearing Westpac uniforms and wanted to work for the mother company.

At the time a company spokeswoman said Westpac decided on the name change after feedback from customers, confused by the multiple brands. It was the end of an era after Westpac had bought Bank of Melbourne in 1997 for $1.4 billion.

But fast forward to July last year and the Bank of Melbourne brand was back, as part of Westpac's much vaunted multi-brand strategy. The Sydney-headquartered Westpac rebranded 34 Victorian-based St George branches and announced plans to triple the size of the Bank of Melbourne network over five years. The change of heart required one-off spending of just short of $100 million, while the total rollout over five years would not leave much change out of $580 million.

The multi-brand strategy in Victoria is all about trying to win new customers who prefer a ''regional bank'' experience in a state where regional bank representation is low compared with the national average.

Other banking brands in the Westpac stable include St George Bank and BankSA out of South Australia.

Indeed, the ads in the Bank of Melbourne window talk about matching the big four on price while beating them on service. Not a bad bit of spin for a bank wholly owned by the country's second biggest major.

Coincidentally or otherwise, since the announcement of the re-emergence of the Bank of Melbourne brand, shares in Westpac have underperformed peers by about 5 per cent. On consensus numbers Westpac now trades on a 10.5 times next year's expected earnings and offering an expected yield of about 7.5 per cent.

Last week, new CBA CEO Ian Narev delivered a strategy briefing for his bank that was not heavy on detail. But one of the things he was definitive about was that CBA would not pursue a retail banking strategy that was built around ''differentiation of a whole lot of different brands''. The gibe at Westpac didn't go unnoticed.

A multi-brand strategy is a second-best strategy. It might work when credit growth is trucking along at double-digit levels but it looks an expensive mess when credit growth is anaemic. The prospect of Bank of Melbourne simply winning customers off the weakened Westpac franchise is too great. In tough times, banks should focus on boosting back-office efficiencies behind one strong brand.

Critics of the Bank of Melbourne proposition argue that it is too likely to attract mass retail rather than high-net-worth customers that are the driver of retail bank profitability. Who with any brains or cash to invest is going to think Bank of Melbourne is really an independent regional bank?

Westpac chief executive Gail Kelly has said Bank of Melbourne is a key part of Westpac's multi-brand strategy and is building on the success of the BankSA brand, which enjoys strong loyalty in its home market. It will be interesting to see the reaction of the incoming head of Westpac's domestic business, Brian Hartzer, when he starts in July.

Old bankers say retail banking is the driver of excess returns to investors over the long term. In these chastened times, Westpac should have thought twice about going back to its past in an attempt to grow its franchise.

Stewart Oldfield is an analyst at Investorfirst Securities. This commentary should not be construed as investment advice.