ANZ appoints CFO Elliott to replace CEO Smith

Australian banking giant ANZ’s chief executive Mike Smith, who oversaw a big push into Asia, said he was stepping down Thursday after eight years in the top job.

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.

“Fundamentals of our strategy won’t change”, Elliott told an investor briefing yesterday.

All these factors suggest that Elliott’s time running ANZ will be more focused on squeezing returns out of the business, rather than radically reshaping or expanding it.

The announcement to the ASX follows a “detailed review of external and internal candidates”, ANZ chairman David Gonski said.

Elliott, now the bank’s chief financial officer, made the comments after Australia’s No4 lender said he would take the helm from Mike Smith from next year. He will remain with the bank as a nonexecutive adviser on Asian affairs, initially for a one-year term.

Inevitably, this has put the market’s focus squarely on ANZ’s “super-regional” strategy, which has never been popular with the dividend-loving local investors. Before that, he spent 20 years at Citigroup, holding senior positions in Australia and New Zealand, the United Kingdom, the US and in Asia-Pacific and the Middle East. Before that he was a senior executive at investment bank EFG Hermes.

Gonski also called out Smith’s strong focus on the Asia Pacific.

Mr Smith will actually step down on December 31 and Mr Gonski said he considered his pledge honoured, adding that the promotion of Mr Elliott was on schedule. It owns minority stakes in banks in countries including Malaysia, Vietnam and China, and opened a branch in Qingdao on China’s coast last month.

Mr Gonski said Mr Elliott was the “outstanding candidate for the role of chief executive”.

Mr Elliot will commence as CEO from the first of January 2016. “He stood by his undertaking and I worked within that undertaking”. “I do want to do other things”, he said.

This tougher environment helps to explain why the most recently appointed bank chief executives – such as Westpac’s Brian Hartzer and National Australia Bank’s Andrew Thorburn – are keeping a tighter rein on costs and focusing on domestic businesses that generate the bulk of profits.