Scandal puts ANZ CEO succession plans for Shayne Elliott in disarray

Multiple investigations into ANZ’s trading division have likely pushed out the bank’s succession plans for long-serving CEO Shayne Elliott, fund managers say.

ANZ chief executive Shayne Elliott is the longest serving of the big four bank CEOs, having been at the helm since 2016. Picture: Arsineh Houspian

Shayne Elliott’s succession plans have been thrown into disarray as ANZ grapples with multiple investigations into its trading division, with the long-serving CEO now likely to push to stay on for at least six to 12 months longer than planned to get the lender through its latest scandal, fund managers say.

The big question is whether the board will favour Mr Elliott persisting in his role to steer the bank versus bringing in an external newcomer to take charge with a clean slate.

Mr Elliott has helmed the big four bank for the past eight and a half years, including guiding it through its last markets scandal. Speculation had grown in recent months that firmed-up succession plans would be outlined to the market before the end of the calendar year, with Mr Elliott now the longest-serving of the big four CEOs.

This has now likely been pushed out, with market manipulation allegations, as well as misconduct within the dealing team, set to keep Mr Elliott in the top job for longer, Tribeca Investment Partners portfolio manager Jun Bei Liu said.

“It puts more pressure on him to keep running the bank until there’s some level outcome,” Ms Liu told The Australian.

“The market’s not reading too much into (the investigation now) but it puts everything at risk … I would say the succession plan has been pushed out at least six to 12 months,” she said.

ANZ on Thursday said it had terminated and suspended “several employees” in its trading team and was beefing up oversight of its Sydney dealing room after investigating allegations of inappropriate conduct and behaviour. But shareholders will be more alarmed by the risk the backlash from the multiple investigations could engulf the wider bank and could yet hit chief executive Mr Elliott, with the bank’s board already mulling action against the CEO and other senior executives.

Australian Eagle Asset Management’s portfolio manager Alan Kwan said the investigations made it difficult to predict the succession plan timing.

“It’s really hard to say because I’m not exactly sure who the internal candidates are now, given that one of the potential successors (Mark Whelan) is in charge of the institutional division. So it becomes complicated,” Mr Kwan said.

Mr Whelan had been touted as one of the internal candidates on the shortlist to replace Mr Elliott but his proximity to the trading division has now put this in doubt, multiple fund managers told The Australian.

Mr Kwan said he would lean toward the succession being delayed until the corporate regulator concludes its investigation into alleged market manipulation by the lender’s dealing team.

Another fund manager, who asked not to be named, agreed with the sentiment that Mr Elliott’s succession plan may be pushed out by six to 12 months.

But all of this is dependent on the outcome of the investigations. If ANZ traders are found to have manipulated the market, Mr Elliott may have no choice but to go out sooner than he would choose, the fund manager said.

The allegations levelled against the bank could hardly come at a worse time for Mr Elliott, who was set to go out on a high following the acquisition of Suncorp Bank, which got the green light from the government only weeks ago, in what will be the biggest banking merger in 15 years.

ANZ shares finished Thursday’s session down 0.6 per cent at $29.32, against a broader market decline of 1.3 per cent. The stock is up 1.7 per cent over the past month.