Westpac Banking, Australia's fourth-biggest lender, said on Friday it had appointed Gail Kelly, the head of rival lender St. George Bank, as its new chief executive.
Kelly will replace Westpac's David Morgan who steps down at the end of January 2008, the bank said. Morgan has been chief executive of Westpac since 1999.
Kelly, who joined Australia's fifth-biggest bank in 2002 after holding senior banking positions in Australia and South Africa, had long been touted as a candidate to head one of the nation's big four banks.
"She is a proven chief executive whose values are closely aligned to the Westpac culture. It is clear Gail has the energy, skills and experience we need," Westpac Chairman Ted Evans said in a statement.
Kelly would now head an institution with a market value of A$46 billion, more than double the market value of St. George.
Born in South Africa, Kelly, 51, will take home an annual salary of A$2.7 million (US$2.1 million) until January 2010, with an additional A$11.8 million in short and long-term incentives available over fiscal 2008 and 2009.
Under Kelly, St. George more than doubled its assets to over A$100 billion and more than doubled profits to top A$1 billion, and emerged as the fastest-growing lender to small businesses. And all of this was achieved through organic growth.
In a separate announcement, St. George named Paul Fegan as its interim chief executive until a replacement for Kelly was found. Fegan is head of the bank's the retail and wealth management division.
Kelly's appointment makes her the only woman CEO of a top-20 Australian company. The only other high-profile woman in a senior boardroom position in Australia is Qantas Airways Chairman Margaret Jackson, although she steps down in November.
Kelly also becomes the second South African to head a top-20 company. In May, the world's top miner BHP Billiton named Marius Kloppers as its chief executive.
Kelly's appointment is also an indication Westpac will continue to focus on domestic growth. While rival lender Australia and New Zealand Banking Group named HSBC Holding's Asian business head Michael Smith as its new chief in June, suggesting ANZ's continued preference to expand into Asia.