ANZ hires HSBC's Smith as CEO

SYDNEY: Australia & New Zealand Banking Group hired HSBC Holdings’ head of Asia Michael Smith as chief executive officer to drive expansion in the region where the bank plans to double investment. Mr Smith, 50, replaces Jo-hn McFarlane, who ran Australia’s third-biggest bank for a decade.

The 29-year HSBC veteran is based in Hong Kong and was previously posted in Argentina, where he was shot in the leg during an ambush in 1999. A successor will be announced in due course, HSBC said.

“I’ve watched the Australian banks for a number of years and often wondered why they haven’t done more in Asia,” Mr Smith said in an interview. “When a market like Australia becomes mature, you have to look for opportunities elsewhere and I really do feel there is a significant opportunity in Asia.”

Mr Smith will be paid a salary of A$3 million a year for the first three years, with a short-term bonus of as much as A$3 million a year and a long-term incentive of as much as A$3 million a year in stock, ANZ said in a statement Tuesday. He will also be paid a ‘sign on’ sum of A$9 million over three years to compensate for pay foregone at HSBC.

ANZ Bank said in December it was seeking to replace Mr McFarlane, a Scot. His retirement on September 30 will end the longest tenure among the heads of Australia’s four biggest banks, during which Mr McFarlane, 59, bought New Zealand’s largest bank.

Mr Smith, a UK citizen, has been with HSBC since 1978 and led its Asia unit since August 2003. He worked for the bank in Hong Kong, the UK, Argentina and Malaysia after graduating with honours with an economic sciences degree at City University in London.

Mr Smith “has developed an impressive track record across multiple businesses and geographies with extensive experience in retail and corporate banking,” ANZ chairman Charles Goode said.

In China, ANZ Bank agreed in November to buy 19.9% of Shanghai Rural Commercial Bank and also owns 20% of Tianjin City Commercial Bank. Elsewhere in Asia, it owns 10% of Vietnam’s Sacombank, 29% of PT Panin Bank in Indonesia and 40% of a credit-card venture with Metropolitan Bank & Trust in the Philippines. Last year, it started a bank in Cambodia through a venture with Royal Group.

Smith’s key task “is to take ANZ to the next stage in which further expansion into Asia will have to compensate for slower medium-to-long-term growth in Australia and New Zealand,” Johan Vanderlugt, an analyst at Daiwa Securities Group in Melbourne, said in a report after the announcement.