Ex-HSBC Nuno Matos: can ANZ handle another rock star CEO?

ANZ has a history of its ambitions being bigger than its balance sheet. The arrival of a big name global banker adds to these worries.

Nuno Matos, right, is the incoming ANZ chief executive officer, pictured with ANZ chairman Paul O’Sullivan. Picture: Aaron Francis

Once again ANZ has reached for a rock star chief executive by tapping a highly-connected globally focused banker who has worked across three continents, including in some of the toughest markets in the world.

However, former HSBC executive Nuno Matos is set to take charge of a bank that is increasingly battling a string of regulatory issues in its home market. And with the Suncorp banking merger to dominate ANZ, and tech project ANZ Plus deep in its ramp-up phase, investors can be forgiven for wanting a little less excitement in their CEO. For ANZ, the coming years are all about execution.

ANZ has seen it previous rock star bosses like John McFarlane, then recruited from Citibank, and Mike Smith, another HSBC banker, each promising big things on the broader banking stage. And through them, ANZ’s ambitions have often been bigger than its balance sheet. And have come at a cost to investors.

Outgoing boss Shayne Elliott, himself a former Citigroup banker, spent much of the past decade unwinding ANZ’s pan-Asian expansion. But is ANZ planning to jump back into the global league again with Matos?

ANZ’s chairman Paul O’Sullivan is at pains to point out that even though Matos comes to the table steeped in international banking, there will be no change of direction.

“This is not us flagging we’re coming back on a new strategy in Asia,” O’Sullivan tells The Australian. “The board has been very clear. The strategy for ANZ is established. It may continue to evolve, but we’re not flagging any major change.”

Make no mistake, however, in naming Matos as its next CEO, ANZ has gone for a top-tier banker. As an outside appointment this is likely to bring at least some shift in direction.

ANZ saw the opportunity and moved quickly to lock in Matos. It comes just weeks after he resigned from his role heading up HSBC’s influential wealth and personal banking business. To underscore the chase for the top talent, ANZ has been prepared to wait for seven months to get Matos up and running at its Docklands headquarters.

The Portuguese national and former Santander executive has worked across institutional and retail banking around the world including in the US, and started his career in central banking.

Outgoing ANZ CEO Shayne Elliott unwound a costly Asian expansion. Picture: Arsineh Houspian

He was widely seen as the leading candidate to become the next HSBC chief executive, but that bank’s board instead went for chief financial officer and cost-cutter Georges Elhedery.

Matos left HSBC in October, but remains on gardening leave at his base in Hong Kong where he has since fielded a string of approaches from banks around the world.

As my colleague Joyce Moullakis reported, Westpac also considered him for their new chief executive. The strong interest from Australia from two big banks comes even as Matos has had very little to do with banking here.

Matos was meeting staff in Docklands during a brief visit on Monday before flying out to Hong Kong. Although ANZ has stage-managed his appointment, they are not ready to push him out publicly yet, citing restrictions that he still technically works for HSBC, a competitor in several markets.

Matos’s long work out period – he doesn’t start until next July – means the outgoing Elliott will be well into his ninth year before officially stepping down.

And while Elliott’s final months in the job are likely to be consumed with regulatory scrutiny around the bank’s bond trading scandal, he has spent much of his time since taking charge de-risking, cleaning up and offloading more than 30 of ANZ’s global businesses and returning much-needed capital back home, as well as to shareholders.

The international footprint has changed dramatically, now built around business customers that ANZ banks, as well as transactional banking and trade flows across mostly across South East Asia.

ANZ is the most international-focused of the Australian big four banks. Picture: Getty Images

At the same time, Elliott has tilted ANZ back to Australia, bulking up with the $4.9bn Suncorp bank buyout. He has also pushed ahead with the high-risk multibillion-dollar tech spend in the long-promised ANZ Plus platform. Both of these areas will need plenty of attention in coming years.

Elliott’s local focus has been endorsed by investors and this is why they are nervous ANZ is about to undergo yet another one of its trademark shifts. ANZ’s shares ended down 3.6 per cent on the appointment.

ANZ published an internal Q&A with Matos where he said the strategy Elliott has been pursuing “is the right one”.

“The direction is correct. ANZ has fantastic competitive positions,” Matos says.

He said the institutional business, that represents the bulk of the bank’s international footprint “is focused on the right things”. It is capital light, he noted and its investment in transaction banking gives it a competitive advantage.

“It’s a business that connects Australia and New Zealand with the world and I think its makes absolute sense.”

Big plans

Of the Australian bank CEO transitions, ANZ is so far the only lender to have reached for an outsider.

Both National Australia Bank and Westpac this year have tapped insiders for their new bosses, while Commonwealth Bank is around three years away from replacing CEO Matt Comyn and has at least three internal contenders to consider. So why did ANZ go for Matos?

O’Sullivan says the appointment is built on three themes.

First, Matos has extensive experience in both retail and institutional banking so he

comes to ANZ a well-rounded executive. ANZ is underweight in retail and strong in institutional.

Matos headed up Spanish bank Santander’s retail banking business in the US, and he also ran HSBC’s large UK-based bank. And it shouldn’t go unnoticed that as former central banker with risk experience at Santander and during his time at HSBC, he won over regulators – a point that helps ANZ right now.

Secondly, the new CEO has a track record of executions, particularly on bank integrations, O’Sullivan tells The Australian. Even as Suncorp is a relatively small acquisition, any bank merger is highly complex. Any disruption is likely to drive away Suncorp customers or even put ANZ customers off-side, undercutting the value of the deal.

Finally, Matos’s international experience is regarded by the ANZ board as a major strength, suggesting there remains room to invest, in specialist trade areas.

Nuno Matos at the ANZ headquarters on Monday. Picture: Aaron Francis

“Given his experience on execution, on bank integrations, on working internationally, and on markets, retail and wholesale, and all of that combined together for us, made a compelling appointment,” O’Sullivan says.

“(Matos) comes from a pedigree which is largely 20 years of Santander, and then 10 years with HSBC. I’m confident he’s someone who actually comes from a fairly unique mould.”

Still, investors will need to be comfortable this is the right fit for the times.

Matos’ limited experience here means the new boss needs to lean on his Australian and New Zealand executives more than other bank bosses, as he takes time getting familiar with the landscape. There is likely to more turnover among ANZ’s own executive ranks.

Institutional boss Mark Whelan, who was the leading internal contender, is unlikely to stay for the long-haul. The bond scandal enveloping his own business meant Whelan was forced out of the running, pushing the board to look outside for its next CEO.

Another to watch will be retail banking boss Maile Carnegie, the former Google executive who has been strongly supported by Elliott through her ANZ career. Here, Matos will have to decide between sticking with the executive team and the structure he inherits or whether to bring in his own talent as ANZ Plus switches on. For any external chief executive starting fresh, there’s plenty of opportunities to shake things up.

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Originally published as Ex-HSBC Nuno Matos: can ANZ handle another rock star CEO?