Bendigo and Adelaide Bank taps Richard Fennell as CEO, puts major bank bosses in focus

Bendigo and Adelaide Bank’s CEO appointment has cemented succession planning as a key topic in the sector, fuelling expectations at least two of the big four banks follow suit.

Bendigo and Adelaide Bank’s new CEO Richard Fennell. Picture: Jane Dempster

Bendigo and Adelaide Bank’s appointment of Richard Fennell as its next chief executive has cemented succession planning as a key topic in the sector in 2024, fuelling expectations at least two of the big four banks will follow suit and announce new leaders in the next six to 18 months.

CEO succession is top of mind in the banking industry this year, with Bendigo Bank on Tuesday adding to the thematic by tapping internal candidate and consumer boss Mr Fennell to take its top post from Marnie Baker.

The CEO change-over would occur on August 31, the regional bank said in an ASX statement on Tuesday. It caps a six-year stint in the role for Ms Baker, which included the Hayne royal commission and the depths of the Covid-19 pandemic.

The appointment comes after National Australia Bank also turned to an internal successor in appointing a new CEO this year. NAB’s business banking boss Andrew Irvine took the CEO reins from Ross McEwan in early April.

Fund managers expect further CEO appointments at the larger end of the sector and are monitoring the situations closely.

“Three of the big four (CEOs) probably change this year or next year,” Ethical Partners Funds Management investment director Nathan Parkin said.

“You’ve had NAB already, you’ll get Westpac, you should get ANZ and Commonwealth Bank is probably set for a while.”

Opal Capital Management’s Omkar Joshi said: “It wouldn’t be a surprise if we saw a change in CEO at some of the major banks over the next 12-18 months given their overall tenures.” Another fund manager who declined to be named said he expected Westpac to have a new CEO in the next six to 18 months and for ANZ it was a 50 per cent prospect as to whether Shayne Elliott would be replaced within that period.

Bendigo Bank’s shares declined almost 1 per cent to $11.31 on Tuesday, outpacing the S&P/ASX200’s drop of 0.4 per cent.

Mr Fennell joined Bendigo Bank in 2007, holding positions including chief financial officer, running strategy and the corporate unit and most recently the consumer division since 2018. Mr Fennell – who refused interview requests on Tuesday – is also a director of the Adelaide Football Club and deputy chair of the Helpmann Academy, which brings together the skills and resources of South Australia’s universities.

Bendigo and Adelaide Bank chairman Vicki Carter said Mr Fennell’s “strong focus on the customer” and experience across financial and digital operations would help the bank continue to deliver sustainable growth.

Richard Fennell.

“Richard has driven the bank’s leading deposit franchise through prudent management of our branch network and our unique Community Bank model, shoring up one of the bank’s key competitive strengths, its market-leading household deposit to loan ratio,” she added.

“His extensive experience leading our branch and third-party networks coupled with his deep understanding of digital, as evidenced by his delivery of the new Bendigo lending platform, and many years of experience as the bank’s CFO, will ensure that the bank can continue to deliver sustainable growth.”

In an internal memo to staff, Ms Carter said the bank’s board had undertaken “careful and considered succession planning”, including a detailed external search process.

David Foster, the former Star Entertainment chair, rejoined Bendigo Bank’s board for three days last week before returning to a leave of absence, presumably to help sign off on the bank’s new CEO.

Mr Fennell said he was “grateful for the transformation work” of his predecessor and looked forward to connecting with the bank’s staff.

The slated change-over at Bendigo Bank comes after Ms Baker handed down a better-than-expected earnings update in May, but missed out on buying Suncorp’s bank to ANZ. The Melbourne-based bank received the federal government’s approval to proceed with the $4.9bn deal last week.

Mr Fennell will take the reins amid an increased focus in the banking sector on succession planning. Westpac’s board has hired executive search firm Heidrick & Struggles to help identify a replacement for CEO Peter King. ANZ’s Mr Elliott has been in the role since early 2016, making him the longest-serving CEO among his peers.

Bendigo Bank said Ms Baker had signalled her intention to retire from the bank after 35 years with the group, the vast majority of those in executive roles.

Ms Carter said: “Marnie’s passion and advocacy for regional Australia has ensured the bank stands apart from an increasingly homogenised industry.”

Mr Fennell will start as CEO on a rolling contract and a fixed annual salary of $1.5m, while he will be eligible for short-term incentives worth up to 70 per cent of the fixed pay amount and long-term incentives of 105 per cent.

JPMorgan analyst Andrew Triggs said while the timing of Bendigo Bank’s CEO change was a surprise, he expected a smooth transition.

“Bendigo has a very clear strategy and a well-progressed transformation program, which was annunciated at the recent strategy update. While there may be some tweaks we don’t envisage any major changes,” he added.

But Mr Triggs retained his “neutral” rating on the bank, given its shares are up about 17 per cent so far this year.

UBS analyst John Storey said investors would see the CEO change as “fairly neutral”.

“We would expect minimal disruption to the bank, he said

Originally published as Bendigo and Adelaide Bank taps Richard Fennell as CEO, puts major bank bosses in focus