ANZ CFO Shayne Elliott to take over as CEO, press on with Asia strategy

Australia and New Zealand Banking Group Ltd branch located in a Sydney.
Australia and New Zealand Banking Group Ltd branch located in a Sydney. PHOTO: REUTERS

SYDNEY (REUTERS) - Australia and New Zealand Banking Group's incoming chief executive Shayne Elliott said on Thursday (Oct 1) he was committed to seeking growth in Asia - a strategy that has come under question due to low returns and high costs.

Mr Elliott, currently CFO, made the comments after Australia's No.4 lender said he would take the helm from Mr Mike Smith from next year.

Mr Smith kickstarted the bank's "super regional" strategy in 2007, making it the only major Australian bank to focus on Asia.

Analysts, who have long been anticipating Mr Smith's departure, have said the Asia strategy needs to be reassessed.

"Fundamentals of our strategy won't change," Mr Elliott told an investor briefing. "We remain totally committed to the opportunity but we need to tweak and reassess where and how we deploy our capital."

ANZ's shares climbed 1 per cent in morning trade, in line with the broader market. But the stock has underperformed peers this year, falling 15 per cent compared to 9 per cent declines each for Westpac Banking Corp and National Australia Bank.

Mr Elliott, 51, who joined ANZ in 2009, has been chief financial officer for the past three years. Prior to joining ANZ, he held senior positions in Citigroup over 20 years in Australia and New Zealand, Britain, the United States, in the Asia-Pacific and Middle East. He was also a senior executive at investment bank EFG Hermes.

Mr Smith will be retained as a non-executive adviser to the board, initially for one year, when Mr Elliott takes over on Jan 1, the bank said.

An ANZ spokesman told Reuters last month that the bank was shifting the emphasis of its business in Asia "somewhat from growth to improved returns", although it remained committed to the region. It opened a new branch in China last month.

While ANZ is ranked No.5 for arranging loans in Asia-Pacific ex-Japan so far this year, it falls to ninth place when Australia is excluded, according to Thomson Reuters data.

If ANZ were to place a greater focus on the domestic markets, it would join the likes of ING, RBS and Societe Generale which have scaled back operations in Asia after failing to reach critical mass.

Like ANZ, they pushed into Asia attracted by the region's growth projections, but had to retreat due to cut-throat competition, lack of local expertise and low margins.

Mr Elliott, a New Zealander, collects first edition books, particularly New Zealand fiction, and has an interest in Roman and Egyptian history.