U.S. News

Australia's ANZ Appoints HSBC's Smith as CEO


Australia and New Zealand Banking Group, Australia's third-biggest bank, said it has appointed Michael Smith, head of HSBC Holding's Asian business, as its new chief executive.

Smith, 50, will start on Oct. 1, replacing the well-respected John McFarlane, who will leave on Sept. 30 after 10 years at the helm.

Smith is currently president and chief executive of The Hongkong and Shanghai Banking Corp., chairman of Hang Seng Bank, and the global head of commercial banking for the HSBC Group .

"He looks to be a pretty strong appointment," said Matt Williams, Australian equities manager at Perpetual Investments. "It's clearly signaling, as John McFarlane has done, that Asian growth is
the focus for the bank going forward."

ANZ Chairman Charles Goode said Smith was an outstanding all-round banker who had worked in many different businesses and countries during a 29-year career at HSBC. "He brings ANZ considerable experience of the Asian marketplace and a strong commercial banking background," Goode said in a statement.

Smith said in a statement he had lived and worked in Melbourne for five years, two of his three children were born there and both he and his wife looked forward to returning.

ANZ said Smith would be granted a A$9 million (US$7.6 million) sign-on sum, with a base salary of A$3 million a year, a short-term incentive of A$3 million a year and a long-term incentive of A$3 million a year, subject to performance.

Hang Seng Bank, which is 62% owned by HSBC, reported 2006 earnings of HK$12.04 billion (US$1.54 billion) in March, beating analyst estimates.

The bank has been focused on growing ties with mainland China to drive earnings and diversify beyond Hong Kong's competitive and developed banking sector.

Profits at HSBC's commercial arm hit US$6 billion in 2006, up 21% on 2005 and representing just over a quarter of HSBC's group profits.

ANZ last year extended McFarlane's contract by three months, and sought to end a spat that had played out in newspapers, pitting Goode -- eager to inject new blood at the bank -- against McFarlane and fund managers who wanted him to stay.

McFarlane said then he had always intended to retire at the end of his current contract.

The charismatic, guitar-playing Scot, steered the bank through some tough times when he first took over and has since grown earnings per share strongly.