CANBERRA: One of the Asia Pacific’s leading banks in Australia and New Zealand Banking Group (ASX: ANZ) will have a new leader from January 1 2016 after today’s announcement that current CEO Mike Smith will retire at the end of 2015.
Smith took control of the bank not long before the GFC hit and as a self-confessed Asia-phile has been the driving force behind the bank’s growth into Asia under its ‘super-regional’ strategy. Holidaymakers in Asia will likely have come across ANZ’s ATMs or branches which are now common features across a large amount of major Asian cities and towns.
The only big four bank to have significantly outperformed ANZ over the period of Smith’s eight-year stewardship is Commonwealth Bank of Australia (ASX: CBA). Much of the credit for CBA’s success has been attributed to its development of its best-in-class technology over the period and ANZ’s new anointed chief, Shayne Elliot, has already flagged a renewed emphasis on technology as a priority under his reign.
The leadership transition is likely to be a smooth one given that Elliot is currently the effective number two as chief financial officer and the shares are up 1.6% to $27.50 today largely in line with the market.
The big banks’ juicy fully franked dividends are something of a sacred cow to investors and ANZ is no exception, which means all eyes will be on Elliot’s approach to capital management, while attempting to generate earnings growth and navigate the bank through a period of softening Australian growth.
Selling for $27.52 ANZ’s fully franked yield in the region of 6.5% remains appealing to income-seeking investors, although those after growth would be better off looking elsewhere.
