From NAB to Westpac: Behind banking’s extraordinary day of moves

A series of cascading executive moves in one day, including a high-profile defection, are reshaping the top of the nation’s banks.

The looming battleground for Australian lenders will be across business banking. Picture: Lisa Maree Williams/Getty Images

Rachel Slade’s carefully orchestrated exit as National Australia Bank’s business banking boss was just one of a series of cascading executive moves on Monday reshaping the top ranks of the nation’s No.2 bank – and the No.3 bank Westpac.

However, the executive move that caught nearly everyone off guard – including NAB boss Andrew Irvine – was chief financial officer and one-time strategy boss Nathan Goonan jumping ship to take the same position over at Anthony Miller’s Westpac.

An executive transfer at this level is almost unheard of. Banking loyalties have largely held in place, at least for the very senior bosses. Defections like this can often point to unrest brewing across management ranks. Jarden analyst Matthew Wilson was among those who were worried, slashing his call on NAB from buy to sell.

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NAB CEO Andrew Irvine.

Goonan’s move marks one of the most senior banking switches since former Westpac lifer Phil Chronican (and now NAB chairman) crossed over to ANZ to run retail banking shortly after the Global Financial Crisis.

However, at that stage, Chronican, had at least retired from Westpac for a couple of months. Before then Michael Ullmer moved from a senior CBA retail executive role to an executive director at NAB (Ullmer had also been CBA’s chief financial officer for a time).

Given the core banking tenets of capital, risk and liquidity, the chief financial officer role in a bank is arguably just as important as the CEO. This underscores the significance of the exit to a Sydney rival.

Exit stage NAB: Nathan Goonan. Picture: Supplied

NAB chief Andrew Irvine denies anything broader is afoot. He says Goonan is a strong executive and he’ll do well in whatever he chooses to do next.

“Obviously he’s going to a competitor, and that’s competition,” Irvine tells The Australian.

Goonan’s move significantly bolsters the Goldman Sachs banking tribe Miller is building at Westpac. Miller took charge as chief executive of the big four turnaround project in December. While he joined Westpac in late 2020, he had spent much of his career with Goldman Sachs, including becoming a Hong Kong-based partner with the Wall Street bank.

Goonan started out with NAB, but has crossed paths with Miller when he worked at Goldman in both London and Australia during the early 2000s. He replaces Westpac’s current chief financial officer Michel Rowland, who had flagged his retirement last year. In the meantime, NAB will start a global search for its new finance boss.

“They have background together in Goldman Sachs, and at the end of the day, getting the gang back together was something that I think (Goonan) was excited for. He spent his entire career at NAB apart from those Goldman Sachs days, and he just wanted to test himself doing something different.

“That’s his rationale. I have to take it at face value.”

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NAB outgoing business banking boss Rachel Slade.

Westpac’s institutional bank is now run by former Goldman Australian market boss Nell Hutton and just last month Westpac named Goldman banker turned CBA executive, Paul Fowler, to head business and wealth in a bid to take on NAB.

Combined, the series of changes across the two banks on Monday shows the battleground in business banking is more intense than ever.

And the executive overhauls may not be over.

NAB, the dominant business bank, has been struggling to grow while rivals have thrown everything at the market.

Last year NAB’s Irvine put Rachel Slade – a one-time leadership contender to replace himself – in the plum business role to maintain keep management stability. The appointment followed Slade’s highly regarded stint as retail banking boss.

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Westpac is bolstering its Goldman Sachs alumni. Picture: Christian Gilles

Irvine is a lifelong business banker who still relishes getting out and meeting business customers – he did a tour of the Hunter Valley and Newcastle last week. This means he was always going to be a hard act to follow and the drift in business banking growth at NAB forced him to make a hard call.

He and Slade began talks before Christmas about the future shape of the bank and her role in it. From that it was clear Slade wasn’t going to be a longer-term part of Irvine’s team. She will remain through the transition period, but in an advisory role.

This has gave Irvine the time to turn to his former employer, the Bank of Montreal, to place trusted offsider Andrew Auerbach in the top business executive job.

Auerbach worked closely alongside Irvine in business banking back in Canada, so the NAB boss knows exactly what he is getting. Auerbach, who has been consulting for high-net-worth customers for the past two years, is currently in Australia meeting senior staff and preparing to relocate when he starts in July. This puts the Canadians firmly in charge at NAB while a trade war rages back at home.

“We’ve got a business that everyone’s on record as wanting to come after, and we want to not only defend it, but extend it and grow that business,” Irvine says.

There’s more changes set to come across other big four banks as ANZ’s new chief executive, Nuno Matos, prepares to take charge in July.

The former HSBC banker is expected to move quickly to put his stamp on ANZ, and this means a likely reshuffling of ranks there.

At the same time, Westpac is on the hunt for a new head of retail banking with the exit of one-time leadership contender Jason Yetton.

As luck would have it, Slade left Westpac in 2017 as a senior retail executive there, and was tapped to run NAB’s retail business. She has agreed to stay with NAB until June. Her next step will be one to watch.

Woodside’s tariff win

Woodside boss Meg O’Neill hails from the US west coast, and her energy major has had an unlikely win out of Donald Trump’s global trading spat.

The escalation of the trade war between Washington and Beijing, including China recently slapping a reciprocal 15 per cent tariff on imports of US liquefied natural gas, was the deciding factor sending it Woodside’s way with a new multibillion-dollar supply deal. But Woodside can’t thank Trump entirely. Former president Joe Biden got the ball rolling last year when he put a ban on exports from new LNG projects.

From China’s view, all this is starting to make Australian LNG look like a relatively safe bet again – even with the political threats of directing more gas to the domestic market.

Woodside signed a 15-year supply deal with utility China Resources, taking 9 million tonnes of LNG over the life of the deal. Woodside’s new Scarborough project in Western Australia is expected to supply much of the contract.

This is Woodside’s first sales deal into China, although other operators, including Origin’s APLNG, supply around 30 per cent of China’s LNG imports. Along with Qatar the two represent nearly 60 per cent of China’s market. In recent years China had been looking to diversify supply with other names like Russia and Malaysia providing the balance. US exporters had been hoping to get a slice of the action in China and Asia more broadly.

This is China Resources’ first long-term LNG deal, and chairman Yang Ping says there could be more to come by opening up the potential for “future co-operation between the two companies globally”. Woodside’s other new LNG project is in Louisiana, which awaits a final investment decision for a LNG production and export terminal (it plans to feed in third party gas).

It has the approvals in place for exports, but with tariffs in place may not be able to supply China directly. And Europe is about to step into its own tariff fight putting some uncertainty over the potential of the project.

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Originally published as From NAB to Westpac: Behind banking’s extraordinary day of moves