NAB interim CEO Phil Chronican the right man for the job, investors say
The blood sport of the banking royal commission reached a crescendo with Kenneth Hayne ending the careers of two of the most high-profile bankers in the land; Ken Henry and Andrew Thorburn.
- Phil Chronican was recruited from the NAB board to run the bank after CEO Andrew Thorburn was forced out
- Mr Chronican was regarded as unlucky to miss out on the top job at both ANZ and Westpac earlier in his career
- Ex-NSW premier and retail bank head Mike Baird, current CFO Garry Lemmon, BNZ chief Angela Mentis and former CFO, now Medibank boss Craig Drummond are in the running to take over permanently
One paragraph tucked away toward the back of volume one of Mr Hayne’s report sealed the fate of the National Australia Bank’s chairman and chief executive — ending months of speculation that at least one of them would have to go following their performance at the royal commission.
Former ANZ executive Philip Chronican, currently a board director at NAB, will take on the poisoned chalice of acting CEO from March 1, while an international search for a permanent replacement is conducted.
It is a significant task ahead of Mr Chronican to get the institution back on an even keel and start to repair its reputation with the community and shareholders.
As Dr Henry admitted on ABC TV’s 7.30, the bank has “got an absolute mountain to climb”.
Investors the ABC has spoken to are relieved to hear Mr Chronican will, at least temporarily, be taking the reins, saying he is a “trusted executive” and “proven performer”.
Experienced and trusted
One said there was only one option for the position, given Mr Chronican is “one of the most trusted” bankers in the country.
Mr Chronican was Westpac’s chief financial officer and was believed to be in the running for the top job before Gail Kelly was appointed.
As ANZ’s head of Australia, he guided the local bank through the global financial crisis and moved aggressively into the mortgage market, taking swathes of market share.
“His ethics and experience are of the highest order,” former colleague, ANZ chief economist and now professor at UTS Business School, Warren Hogan said.
“He’s been in the industry for decades and understands the importance of aligning the customers’ interests with the bank’s. He is the right man for the job.”
Bank analyst Brett Le Mesurier said there was a very big task ahead for Mr Chronican.
“I think it is a good set of hands, and yet a safe one. Safe is probably not sufficient, they need someone who is very capable, and he is … and he has the qualifications, the experience, and he would make a good CEO, albeit interim,” Mr Le Mesurier told The Business.
Buried under the drama of the leadership spill was a trading update which indicates tough times are ahead for the bank and its investors.
The bank cites a “challenging environment” with little revenue growth over the first quarter of 2019, not helped by its decision not to lift rates in an attempt to “regain the trust” of its customers.
It has warned there is the potential for “additional costs” of repaying customers and improving systems as a result of the royal commission.
Mr Le Mesurier said investors should remain wary of NAB stocks.
New CEO likely to be another insider
It is expected the new CEO will be a local hire — with ex-NSW premier and now head of NAB’s retail arm Mike Baird a hot favourite. Garry Lennon, the current CFO, has recently been stand-in CEO, while boss of Kiwi bank BNZ Angela Mentis is an outside chance.
It is understood many in the bank would be happy to see ex-NAB executive and now Medibank boss Craig Drummond return to 700 Bourke St, while Mr Chronican in the long term is picked as the most likely successor to Dr Henry.