BoQ chief resigns for health reasons

UPDATED: BoQ’s boss Jon Sutton has resigned citing medical ailments, contrasting with the lender’s assurances seven months ago that he was fine after heart bypass surgery.

Jon Sutton has announced his resignation. Picture: James Croucher

BOQ’s chief executive officer Jon Sutton has resigned citing ill health, contrasting with the lender’s assurances seven months ago that he was fine after heart bypass surgery.

The surprise resignation of Bank of Queensland’s $3 million boss was announced on Wednesday morning, and also came as the 176-branch lender battled loan-growth problems and falling staff-satisfaction levels.

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The resignation has triggered the elevation of Anthony Rose, currently BoQ’s chief operating officer, as interim CEO while a search is underway for a new leader.

Mr Sutton’s departure came after the bank proceeded with well-received initiatives, including diversifying into specialist lending such as to the medical sector, and minimising bad-debt problems.

But he was to some an abrasive figure internally — The Courier-Mail earlier this year reported claims that Mr Sutton himself had a temper and would chew out people publicly. Mr Sutton at the time refuted that depiction, although he added sometimes his “passion” about BoQ’s success could be “confused with what you’ve just said”.

A recent staff survey also showed satisfaction levels had plummeted, with the Finance Sector Union partly linking this to a disconnection between what was happening on the ground and what senior management believed was occurring.

Morgan Stanley analysts this week also published research estimating BoQ’s home loans for this financial year had fallen 1.8 per cent on an annualised basis.

The analysts forecast that earnings per share in 2019 would fall by 7 per cent and return on equity, a measure of profits against shareholder funds, would be 9 per cent, the lowest since the 2013 financial year.

Industry sources questioned whether Mr Sutton had faced pressure to leave.

The bank declined to answer questions on the matter Wednesday, linking the resignation of Mr Sutton, 55, solely to him focusing “on his long-term health following a heart operation earlier this year”.

“After consulting with my family I’ve made the decision to resign to focus on my long-term health. In February I underwent emergency surgery for a triple heart bypass. In the interest of stability, I felt it was important for me to return to lead the business throughout 2018, but the time is now right to look after my health and BOQ has been understanding,” he said in a statement.

Mr Sutton, who has three adult sons, remarried in recent years and is understood to have a younger stepchild, had been splitting time between homes in Sydney and Brisbane.

The resignation rationale contrasts to what the bank had said in May, when The Courier-Mail exclusively revealed he had undergone serious surgery.

In answer to questions such as whether he would retire, the bank had maintained that Mr Sutton was “back at work and has made a full recovery”.

The bank did not reveal the surgery to the market at the time, maintaining it had “considered our disclosure obligations”.

Hunter Green Institutional Broking analyst Charlie Green said while the announcement was sad for Mr Sutton’s family, it came as a surprise because he had been told months earlier that Mr Sutton had made a recovery and would be staying on.

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The incoming CEO faced several challenges, Mr Green said. “How do you battle the headwinds in the banking industry?” he said, citing the likes of low loan growth sectorwide.

BoQ also had a large upgrade of its information-technology systems to handle, Mr Green added.

In his time since the operation, Mr Sutton oversaw the bank’s full-year profits results and its attendance at the royal commission. But he refused interview requests after the organisation’s annual general meeting last week — in which no indication was made of his departure.

Mr Sutton had earned $3.2 million last year, including bonuses. The bank on Wednesday said he was entitled to nine months’ payment in lieu of notice — his base pay is $1.3 million which indicates a $975,000 payout.

A portion of his long-term potential bonus shares would remain active, but he would not get any bonuses for the current financial year.

Anthony Rose will be interim CEO.

Mr Rose had previously been a candidate for the CEO position several years ago. His initial background was as a chartered accountant, but he has had a long stretch in financial services, including acting as chief financial officer for Suncorp’s bank during the global financial crisis.

It is not clear if had any frontline experience with traditional banking, such as customer lending, but one industry source said Mr Rose had “roughed it in the trenches” during his career in investment banking.

Another possible CEO contender is BoQ’s current chief financial officer Matt Baxby.

Mr Sutton himself had come to BoQ’s top job after his predecessor Stuart Grimshaw suddenly departed in 2014 to run a pawnshop lender based in Texas.

Requests for an interview with Mr Sutton, Mr Rose and chairman Roger Davis were declined.