So much for the eight year reign of Mike Smith at the ANZ as CEO.
His long awaited departure and replacement were revealed yesterday on the first day of the 4th quarter and the 2015-16 financial year for the bank and the shares rose strongly on the news, adding more than $1.6 billion in value.
In fact, ANZ shares rose as much as 1.7% to $27.63 on the news that Shayne Elliott, chief financial officer, will replace Mike Smith as chief executive in the early 2016. Mike Smith will step down from the top job on December 31 to be replaced by Mr Elliott the next day.
The bank’s shares ended a bullish day of trading on the wider market up more than 1.6% at $27.52.
ANZ 1Y – ANZ confirms Smith departure
Much of that rise would have been due to the steadier confidence among investors and a drop in volatility from the start of the week. It followed the solid end of quarter trading on Wednesday.
In fact the appointment of Mr Elliott probably had little to do with the rise in the share price yesterday – he had been firming in the betting to replace Mr Smith.
ANZ chairman David Gonski said in a statement the change follows a “detailed review of external and internal candidates”.
Mr Smith steps down after eight years at the helm of the bank and is credited with the group’s deeper move into Asian markets.
Mr Elliott is a 51 year old Kiwi, meaning that three New Zealanders will now run three of the big four banks – Ian Narev at the Commonwealth, the NAB’s Andrew Thorburn, and Mr Elliott. Brian Harzter at Westpac is American born, meaning that none of the Big four banks – the most important financial groups in the country and the stockmarket, has managed to find an Australian executive of sufficient talent to run them.
Mr Elliot joined ANZ as head of the bank’s institutional division in June 2009. Before that he was a senior executive at investment bank EFG Hermes, and before that he spent two decades working for Citigroup.
"Shayne was the outstanding candidate for the role of chief executive given his deep knowledge of the ANZ Group, his strategic vision, global financial services experience and his track record of building and leading strong international management teams," Mr Gonski said in the statement.
Mr Smith, a former HSBC banker, will remain on the board of the bank as a non-executive director for at least one year due to his understanding of the region, ANZ Bank said.
"Mike has been a champion of ANZ and of Australia globally, but particularly in Asia," Mr Gonski said.
"He has also been instrumental in establishing ANZ’s values-led culture and has been a leader in diversity and financial literacy. ANZ is uniquely well positioned because of the foundation Mike has created.”
Mr Elliott made it clear he would continue with his predecessor’s Asian push, despite some growing concerns among local investors and analysts.
"The fundamentals of our strategy won’t change, but I now have the task of evolving that strategy," Mr Elliott told investors yesterday in a tele conference that will involve “tweaking” tactics and looking at areas such as capital allocation.
He said the super-regional approach adopted by the ANZ under Mr Smith still offers immense opportunities.
The new CEO will also have to handle the demands closer to home for more capital from regulators and the approaching slowdown in home lending, which will crimp bank revenues and net interest margins. Both will be big issues, and big cost cuts can be expected in the next two years.
