Bank boss transition rolls on as Westpac and NAB secure new leadership

Australia’s top bankers are in the limelight after the anointing of Westpac’s new boss, leaving just ANZ and Commonwealth Bank to announce their future leadership line-up.

Westpac incoming CEO Anthony Miller, left, is replacing current CEO Peter King, right, who has led the big four bank for the last five years. Picture: Jane Dempster

Australia’s top bankers continue to play a game of musical chairs after the anointing of Westpac’s new boss, leaving just ANZ and Commonwealth Bank to announce their future leadership line-up.

Industry veteran and Judo Bank founder Joseph Healy says turmoil in the mortgage market and buoyancy in commercial lending shows business bankers are back on top.

NAB’s new chief executive Andrew Irvine formerly led the business lending arm of the bank, and Westpac’s incoming CEO Anthony Miller until recently ran the business and wealth unit.

Bendigo and Adelaide Bank is the odd one out after consumer banking boss Richard Fennell succeeded investor favourite Marnie Baker on August 31.

“When you look at the changes announced, it’s the re-emergence of the business banker as CEO after 15 years of retail bankers being the preferred choice,” Mr Healy said.

“That in part reflects the emphasis the banks are now placing on the business market.”

CBA, NAB, Westpac and ANZ have all called out business lending as a priority area for their bankers amid red-hot competition in home lending, in what some have described as a race to the bottom, with some loans being written at below the cost of capital.

Mr Healy said the mortgage market had “run its course” with competition driving down returns from the sector and squeezing margins. “Increasingly banks are looking at business lending and SME lending where the margins are more attractive,” he said.

“There’s a lot more capacity for lending into the business sector going forward, and as banks are under pressure to justify the premium valuations they are currently enjoying, finding profitable growth has got to be a priority for any new CEO.”

Senior bankers indicated the banking sector had now gone through three shifts in leadership in recent decades, with management consultants in vogue throughout the early 2000s.

CBA chief executive Matt Comyn. Picture: Jane Dempster

CBA’s former CEO Ian Narev, now boss of jobs platform Seek, was a partner at McKinsey for almost nine years.

NAB’s former boss Cameron Clyne, who steered the firm from 2009 to 2014, joined from PwC Australia.

Brian Hartzer, who ran Westpac from 2015 to 2019 and led its Australian Financial Services business from 2012, previously held roles at First Manhattan Consulting Group.

Mr Healy, in his book “Breaking the Banks: What went wrong with Australian Banking?”, took aim at the wave of consultant leadership. But he said the latest moves also posed problems for new bank bosses in how to reshuffle management teams and deal with those who missed out on the top job.

“Even though the personal relationships can be amicable, you can’t ignore the disappointments,” he said.

Mr Healy, who missed out on the top job at NAB, went on to found business lender Judo Bank in 2016.

“The big mistake people make is they inherit a team and don’t want to disturb the team,” he said.

Mr Miller, Westpac’s new boss, must deal with the head of its consumer banking division, Jason Yetton, widely seen as a contender for the top job.

ANZ chief executive Shayne Elliott. Picture: Martin Ollman

CLSA analyst Ed Henning said it was likely those who missed out would look elsewhere “if there is an aspiration to become a CEO”.

Meanwhile, two big banks are looking for new bosses.

“The bank CEOs are transitioning at the same time. You’ve already seen three changes of CEO recently. There will probably be one more within the next year,” Mr Henning said.

“You’ve seen three CEO replacements and they’ve all gone internal.”

Mr Henning said internal hires provided stability.

“When you go external you are likely looking for a change agent or bringing in new skills and ideas,” he said.

“The banks that have changed CEOs recently all seem to be continuing on the existing strategy.”

Pengana Australian equities chief investment officer Rhett Kessler said CBA’s massive premium to its listed rivals may be in part due to the stability in the bank’s leadership.

“Their management is so damn good and its young and probably got tenure for a while,” he said.

But he said Westpac’s outgoing CEO Peter King had also “done a really good job”.

“I don’t know if he’s fixed it but he’s sorted out every single issue he hoped to deal with,” Mr Kessler said.