ANZ ramps up CEO search alongside headhunting firm Spencer Stuart

The bank’s board has headhunting firm Spencer Stuart leading the search to replace longstanding chief executive Shayne Elliott, as it navigates immense regulatory scrutiny.

ANZ chairman Paul O’Sullivan, left, is stepping up the search to replace longstanding chief executive Shayne Elliott. Picture: Josh Woning

ANZ’s board has headhunting firm Spencer Stuart ramping up a search to replace longstanding chief executive Shayne Elliott, as the bank navigates immense regulatory scrutiny over a 2023 $14bn government bond issuance.

The Australian understands Spencer Stuart is working closely with the Paul O’Sullivan-led ANZ board to collate a short-list of candidates, as the bank looks to find Mr Elliott’s successor and implement an orderly transition. An announcement is not expected imminently but sources said the executive search firm and ANZ’s board were working methodically to identify the best candidate and had already held a range of meetings with senior bankers.

An ANZ spokesman declined to comment on Thursday.

The active succession process comes as ANZ beds down its $4.9bn acquisition of Suncorp’s banking division, a deal that completed in late July. Early in October, Mr ­Elliott said he didn’t expect to remain in ANZ’s top job to see through a multi-year integration of Suncorp’s bank, as he hinted at a ­potential changeover in 2025.

Mr Elliott, 60, said the integration of the Suncorp Bank acquisition was a “huge opportunity” for ANZ, but he was unlikely to remain at the helm to complete it.

“That’ll take years, I don’t think I’ll see it through,” he said at the time. “They can invite me back for it.”

In some of Mr Elliott’s more specific comments on the timing of his departure as CEO, a role he has held since early 2016, he also said: “The timing will be up to them (the ANZ board) and the discussions we have together over the next year or so.”

Spencer Stuart was also heavily involved in the Woodside CEO search ahead of Meg O’Neill being appointed to the top job in 2021. The firm has conducted executive searches for ANZ in the past too, as has Egon Zehnder, which helped fill Mr Elliott’s chief financial officer role in 2016.

Sources said internal candidates were being considered by ANZ’s board as well as external executives. Among those who are expected to be in the mix are former National Australia Bank executive Angela Mentis, NAB’s head of business banking Rachel Slade, Macquarie Group’s head of banking Greg Ward, Commonwealth Bank’s retail chief Angus Sullivan and business boss Mike Vacy-Lyle. NAB’s former head of institutional bank David Gall and Westpac’s institutional boss Nell Hutton can’t be ruled out as chances. Investors and analysts had considered institutional banking boss Mark Whelan the internal frontrunner to take the ANZ reins but the latest regulatory and cultural issues in his division will likely see him overlooked.

Other internal ANZ candidates include head of New Zealand Antonia Watson, retail banking boss Maile Carnegie and finance chief Farhan Faruqui.

Industry sources said ANZ may find it difficult to attract a global candidate given deferral arrangements around banking pay in Australia, related to the executive accountability regime.

The succession deliberations also come as the Australian Securities & Investments Commission investigates irregular trading and price activity in the government bond market relating to a $14bn issuance jointly managed by ANZ last year.

The ASIC review includes assessing whether taxpayers had to pay more for the bond issuance, given odd trading activity in the futures and bond market around the pricing of the securities.

ANZ’s internal assessment of the trading issue found no material wrongdoing by bank staff in the bond market, but identified staff conduct issues within its markets division and longstanding errors in how it was reporting data to the Australian Office of Financial Management. An internal ANZ probe into broader conduct within its markets unit – which sits within the institutional division – led to the termination of one staff member and ANZ parting ways with two others. Another employee was issued a formal warning and is expected to have their bonus cut.

The prudential regulator in August forced ANZ to hold another $250m in capital due to governance and risk lapses. That took the total additional capital being held for compliance and governance failings at ANZ to $750m. This year has marked a busy one for replacing retiring incumbent CEOs in the nation’s banking sector.

NAB and Westpac have announced CEO changeovers in 2024, alongside Bendigo and Adelaide Bank.

Internal candidate and head of the business division Andrew Irvine took the CEO reins at NAB in April from Ross McEwan, while at Westpac, business banking boss Anthony Miller has been announced as Peter King’s replacement as CEO. That baton change occurs in December.