December 11, 2024 • 18 mins
ANZ has a new CEO, making it the third of Australia's Big Four banks to appoint a new leader this year. But who exactly is Nuno Matos?
In this week’s podcast, Rebecca Jones asks Bloomberg News finance editor Adam Haigh what we need to know about the former HSBC executive and what this new chapter means for the country’s fourth biggest bank.
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Speaker 1 (00:02):
Misbehaving traders, bond market woes a and ZED has had
quite the year. Question is will a fresh new CEO
be enough to smooth this rocky chapter in the bank's history. Hello,
I'm Rebecca Jones and welcome to the Bloomberg Australia Podcast.
Today on the show, Ayan Zed has a new CEO.
(00:24):
His name is Nuno Mattos and he comes to us
from HSBC. He's picking up the reins from Shane Elliott,
who's held the job for the last nine years, and
I think it's fair to say he's seen a fair
bit of activity during that time as boss of Australia's
fourth largest bank. To break down what this new chapter means,
I'm here with Adam Hay. Adam is a finance editor
(00:46):
based in Sydney for Bloomberg News.
Speaker 2 (00:48):
Adam, thanks for joining.
Speaker 3 (00:50):
Me, Hi beg great to be here now, Adam.
Speaker 1 (00:53):
The timing of this is surprised a few people, but
we knew succession planning has been in the works for a.
Speaker 3 (00:58):
While, right, Yes, I think in one sense, you know,
it's come before the end of this year, and that
might have been a little bit sooner than some have expected.
You know, some people thought it might be the early
part of next year, but they've gone ahead and they've
found their guy, so they're happy to get it announced.
Of course, you have a transition period now, so you know,
Matos himself doesn't come into the role until July, and
(01:21):
Shane will have that transition as well, so you know,
I think they they in terms of timing, they wanted
to get it done before the end of the callingdar
year if they could, which they have been able to do,
and then it leaves them some space. They have the
AGM next week of course, but as I said, they
do have this transition period where they can really explore
(01:41):
some of the new challenges that the mathos will face.
Speaker 1 (01:45):
And two things about the incoming CEO. As I mentioned
in the open, he's from HSBAC. He did apply for
the top job there, didn't get it. He's giving everyone
who applies for a promotion gets passed over some hope
that they'll get an even better gig. And look, Adam,
what could be better than getting to move to the
greatest city in.
Speaker 2 (02:05):
The world, Melbourne. Can you tell us a little bit.
Speaker 1 (02:08):
About Nuno and his background and some of the key
challenges he's going to face on day one at A
and Z.
Speaker 3 (02:16):
Yeah, so an Z chair Paula O'Sullivan said he was
spoilt for choice really, and maybe that's a bit of
pr spin on their part, but they clearly did have
a number of good candidates on the plate. They've decided
to go with Mattos. And he does have quite an
interesting and distinct and unusual background that isn't very common.
Speaker 4 (02:37):
So the first of those is that you know.
Speaker 3 (02:40):
He has this wholesale and retail banking background, two very
important areas for A and Z. So he's run HSBC's
Mexico business. He also ran the HSBC business in London,
that the British arm of HSBC, and of course before
that he held a number of senior roles at Banco
(03:03):
Santander that the Spanish bank.
Speaker 4 (03:05):
As well.
Speaker 3 (03:06):
His own personal characteristics and history are also quite unique.
His grandfather came from India and moved to Mozambique in
his thirties. He met his wife in Peru and one
of his kids was born in Spain.
Speaker 4 (03:22):
The other one was born in Brazil.
Speaker 3 (03:24):
So clearly a lot of international flavor for someone who's
going to have to uproot his life and move from
most recently being in Hong Kong to Melbourne having not
lived in Australia before. So clearly this was a way
for A and Z to take advantage of some of
that talent that fell out of HSBC on the back
(03:47):
of that reshuffle with a new CEO there earlier this month.
He was a contender for that top job. That was
very clear and we have reported that in the past.
So there is a sense that once A Z knew
that he had become available because he wasn't going to
get that job, and he did move reasonably quickly into
into front running for the job at A and Z.
(04:10):
So yeah, this twin kind of experience of wholesale plus
retail is also what you got from a lot of
analysts who are reacting early this week to the appointment.
So see that is a really good background to kind
of move on with some of the big projects that
he's going to have to tackle when he gets his
feet under the desk.
Speaker 5 (04:30):
A and Z.
Speaker 2 (04:31):
It's quite a unique combination.
Speaker 1 (04:33):
Let's have a listen now to what Mattos himself said
about his new job on Monday.
Speaker 5 (04:39):
Personally, I must confess it's a very emotional moment to me. Right,
this is if you want, this is a moment where
you feel you achieve your dreams, you'll deliver your personal
goals after a long career where I feel like I
worked very hard, and being granted the leadership or project
of this caliber feels very very special. So I am
(05:03):
very very excited, Adam.
Speaker 1 (05:05):
One of the most important jobs of a board is
to appoint the CEO. What are the risks of appointing
an outsider as A and Z have done with Matos?
Speaker 2 (05:17):
Is it typical for a big four.
Speaker 1 (05:18):
Bank to go to someone external rather than from promoting within.
Speaker 3 (05:23):
In a sense, it's not that unusual, but if you
look at recent history then it does look a little
bit different to what some of A and Z's competitors
have done. In Australia National Australia Bank, for example, their
new CEO, Andrew Irvine, was an internal promotion. He had
run their business bank for a number of years and
they've recently elevated him to CEO. And similarly at Westpac,
(05:46):
Anthony Miller, who's a former Goldmanner who's now about to
become CEO of Westpac. He was also running a very
key division at Westpac and was an internal move, so
it is different in that sense relative to those two
exam but it's been very well telegraphed that A and
Z have been looking widely and very globally for this appointment.
(06:10):
So I do think it's fairly crucial that they've actually
ended up going with that strategy, and I wasn't surprised
that they've gone with an outsider. I think a lot
of people in the market weren't surprised that they decided
to go with that approach. That's really what they've been
hinting at when they've been kind of making noises about
succession planning in recent months. And it's not a reflection
(06:31):
of a lack of internal talent. In fact, quite the contrary.
They do have some great people running in the big
businesses at A and Z, but they just wanted that
extra global flavor. It's the one thing that separates A
and Z somewhat that institutional business and that kind of
Pan Asia business that's still very important growing in China,
growing in places like India, they do need that international
(06:55):
sense of scale and experience, and I think that was
a key attribute that Mattos prought to the table.
Speaker 1 (07:01):
And that obviously leads me to the question about who
has missed out on this top job.
Speaker 4 (07:08):
Well, I do think it's really crucial to look.
Speaker 3 (07:10):
For Humatos ends up bringing in as his senior management team,
and whether that's new people from outside and he brings
those in, or whether that's people who are already in
senior positions at A and Z which he agrees to
hold on to and to keep to keep in key positions.
So I think Malee Carnegie, who's run the retail band
(07:32):
ZED for a number of years now. She's been muted
as a contender for potentially having been a replacement for
Elliott in the past, so let's look out for what
happens with her role in her future. But also Antonia Watson,
who is the CEO for A and ZED in New Zealand.
(07:53):
She'd also kind of been well thought of in the
running for the top job, so let's keep an eye
there on on whether she's brought into the frame under
the new CEO. But then, of course, third, it was
also Mark Wheelan, who I think it's worth mentioning because
Mark's been there for a long time. He runs the
(08:13):
institutional bank, which is the area of the bank that's
really gone from strength to strength under his leadership. It
had a really low r awe. He was really struggling,
and he's really turned that around. He's really ramped up
the profitability at that bank. They had record revenues last
year and it's a really strong area of growth.
Speaker 4 (08:32):
Now. Of course, there.
Speaker 3 (08:33):
Is that tarnished element of Wheelan presiding over the years
come to discover some months around problems in that market's unit.
So you've had the allegations of potential market manipulation of
bond traders there. You've also had the kind of the
misconduct and misbehavior including some you know people in the
(08:58):
on the trading floor that would drinking on the job.
That's been very well publicized this year. So you know
what Wheeland's future is against that backdrop of having done
really well on the business side, but also some of
the some of the pr not looking too good and
the optics there. So so yeah, certainly watch out for
for how Wheeling places in this in this in this
(09:20):
next phase. But also worth mentioning that Paul O'Sullivan, the
A and Z chairman, was very clear to kind of
hint on on Monday that you know they will be
doing more on this non financial risk management element as
he calls it so that that is all these things
around the allegations of things that went wrong in the
(09:41):
markets unit. So I do feel like there's more to
come quite soon on that. Whether we'll get that before
you know, the AGM next week or whether that's something
for the first quarter of next year hard to know,
but I think that's certainly a big element to look
out for more news on what they're doing there.
Speaker 1 (09:59):
Let's take a listen to Shane Elliott. He was on
Bloomberg TV back in September and was talking about the
bank's raft of issues recently.
Speaker 2 (10:09):
Let's take a listen.
Speaker 6 (10:11):
Well, these are pretty serious allegation that we're working them
through as a board. As you would imagine, we're dealing
with our regulators. There's a long way to go in
terms of our regulators completing their investigations where we can.
We've already taken action around some of those areas, but
there's a long way to go, as I see it,
and we'll work positively and constructively with essek Adam.
Speaker 1 (10:29):
So at the end of the day, how has it
unraveled for Elliott in this final chapter of his career
at ayan Z. What is his legacy going to be
is the last twelve months of allegations around bond market manipulation,
misbehaving traders. Is that going to overshadow all of the
(10:50):
other things that he's done during his time at A
and Z, including the sun Coop acquisition which was which
was a big one, right.
Speaker 3 (10:57):
Yeah, absolutely, I don't think you can ignore that the
severity of what's happened in terms of some of the
problems in the markets unit, and of course Elliott's own
compensation has been hit by that. We learned a few
weeks ago in the firm's annual report about how he
took a cut of more than a million dollars to
his own compensation as a result of some of those
(11:18):
things that have been going on.
Speaker 4 (11:19):
So clearly there is that, But I.
Speaker 3 (11:21):
Mean, if you look more broadly and more longer term,
he's been in the CEO role for nine years, and
before that was in very senior management jobs at the bank.
He's been at the bank a long time, and a
lot of his career really speaks of tremendous success quite frankly,
And I mean you mentioned the Sun Corp deal, I
(11:41):
mean buying such a massive piece of m and A
bringing on all these new customers, which is really a
story about growth in Queensland, big fishing growth, great sense
of growth in that area of Australia, which could be
by a returning business for them if they get the
integration right, and of course that's going to be a
(12:02):
big thing for Matos. But clearly the legacy that Elliott
leaves is having got Bill done. You know, it went
through the courts and almost at one point you thought
it wasn't going to get done and then it got overturned.
Speaker 4 (12:13):
So I think that's important to note.
Speaker 3 (12:16):
But of course twenty twenty four and the bank coming
into twenty twenty four having had a you know, really
blowout profit number last year and a sense of real optimism,
there's just that kind of dark cloud that's ended his
nine year position at the top of the bank that
I think just kind of leaves that that little stain.
But of course an Z have been very clear. They've
(12:38):
apologized for the for the bond trading reporting error that
they that they said sorry for. Elliott's personally apologize for that,
and they're continuing to hold the line that they don't
see any evidence of any market manipulation. The ACIC investigation
is ongoing the security his regulator continues to look at that,
(12:58):
but we're still maybe some time away from them actually,
you know, giving us more information on what's happened there.
So I think just look at the long term and
my senses that he will be remembered very fondly by
not just an ZED staff but also a ZED shareholders.
Speaker 1 (13:16):
And when we come back, let's take a look at
what the outlook for Australia's banking sector looks like.
Speaker 2 (13:22):
For the year ahead.
Speaker 1 (13:28):
And welcome back to the Bloomberg Australia Podcast. You're with
me Rebecca Jones, and I'm joined by Bloomberg Sydney based
finance editor Adam Haig about the changing of the guard
at A and z Adam So, with the appointment of Mattos,
it means that three out of our biggest four banks
have new CEOs heading into twenty twenty five. Who would
(13:51):
have thought what is the outlook for bank stocks in
Australia at this point?
Speaker 2 (13:56):
What's the street telling you?
Speaker 4 (13:58):
Well, I mean you just have.
Speaker 3 (13:59):
To look at the performance of some of these stocks
really over the last year. You know. Obviously the caveat
there is that future performance is no indicate past performance,
no indicator of future performance, but just give you the
sense of how well these stocks have done. So through
the Friday close last week, an Z is up twenty percent,
so it's been it's the laggard, but it's still a
(14:20):
material increase in the share price. National Australia Bank up
twenty six percent, Commonwealth Bank up forty percent, and West
Back up forty three percent. And of course that's without
even including dividends. So if you throw the reinvested dividends
into their shareholders have had very good performance.
Speaker 4 (14:38):
In bank stocks in Australia.
Speaker 3 (14:40):
Now, of course, bank stocks around the world have had
a very good year. We've had a sense from the
Federal Reserve in the US that maybe interest rates won't
be as won't be coming down as quick as people
might have thought a few months ago, and that kind
of slightly more benign economic environment does feel supportive for
bank stocks.
Speaker 4 (14:59):
But I think if you look at.
Speaker 3 (15:00):
The situation in Australia and you look at the sense
of what the market is thinking about what might happen
next year and how that would impact bank profits, it's
fairly easy to create, you know, a reasonably good argument,
a thesis based on that benign economic environment. Absolutely, real
(15:21):
uptick in the unemployment rate in Australia means that inflation
is relatively in check and the jobs market is steady,
so interest rates may not move that much and in
which case there won't be additional pressure on net interest margin.
You know, the key gauge of profitability at banks. Banks
will continue to be able to eke out profits. It'll
(15:42):
continue at places like A and Z to be a
supportive environment to onboard and integrate Sun Corp and all
the staff involved with that deal. So you could potentially
have a situation where bank stocks continue to do reasonably
well into next year. Now, of course, if we have
a big uptick in the jobless rate in Australia, then
(16:04):
that might significantly change the pricing for interest rates and
then you might see a bit more pressure on margins
and so forth. But I think at the moment, if
you look at what market pricing is telling you, the
setup for investors and for bank stocks is reasonably solid.
Speaker 1 (16:21):
And finally next week we've got the A and Z
AGM happening. Are you expecting any fireworks to come out
of that one?
Speaker 3 (16:29):
Well, I think we should be on the alert for
some more information. As I mentioned earlier, O'Sullivan Z chairman
suggesting that we might have more to come out on
this element of what the bank is doing to improve
this some of these things that have gone wrong at
(16:49):
the bank, and of course the regulator has slapped this
additional capital requirement on the bank, so investors are still
keen to see demonstrable evidence of what the bank is
doing to improve risk management in these areas. So there's
maybe a sense that we get a little bit of
that either before or at the AGM, or maybe that
(17:10):
runs into next year. But I think, you know, given
what Elliott's been through this year, and given the last
few months of just how much A and Z have
been in the press, there could well be you know.
Speaker 4 (17:23):
An interesting few things go. Maybe not fireworks, but be
worth watching.
Speaker 2 (17:29):
We'll certainly be following along. Adam.
Speaker 1 (17:31):
Thanks for joining me, and thank you for listening to
the Bloomberg Australia podcast. I'm Rebecca Jones. This episode was
recorded on the lands of the Rovendery and Gettigal people
of the callin Aniurination. It was produced by Paul Allen
and edited by Chris Burke and Ainsley Chandler. Don't forget
to follow and review the show wherever you get your podcasts,
(17:52):
and sign up for Bloomberg's free daily newsletter, Australia Briefing.
Go to bloomberg dot com to subscribe.
Misbehaving traders, bond market woes a and ZED has had
quite the year. Question is will a fresh new CEO
be enough to smooth this rocky chapter in the bank's history. Hello,
I'm Rebecca Jones and welcome to the Bloomberg Australia Podcast.
Today on the show, Ayan Zed has a new CEO.
(00:24):
His name is Nuno Mattos and he comes to us
from HSBC. He's picking up the reins from Shane Elliott,
who's held the job for the last nine years, and
I think it's fair to say he's seen a fair
bit of activity during that time as boss of Australia's
fourth largest bank. To break down what this new chapter means,
I'm here with Adam Hay. Adam is a finance editor
(00:46):
based in Sydney for Bloomberg News.
Speaker 2 (00:48):
Adam, thanks for joining.
Speaker 3 (00:50):
Me, Hi beg great to be here now, Adam.
Speaker 1 (00:53):
The timing of this is surprised a few people, but
we knew succession planning has been in the works for a.
Speaker 3 (00:58):
While, right, Yes, I think in one sense, you know,
it's come before the end of this year, and that
might have been a little bit sooner than some have expected.
You know, some people thought it might be the early
part of next year, but they've gone ahead and they've
found their guy, so they're happy to get it announced.
Of course, you have a transition period now, so you know,
Matos himself doesn't come into the role until July, and
(01:21):
Shane will have that transition as well, so you know,
I think they they in terms of timing, they wanted
to get it done before the end of the callingdar
year if they could, which they have been able to do,
and then it leaves them some space. They have the
AGM next week of course, but as I said, they
do have this transition period where they can really explore
(01:41):
some of the new challenges that the mathos will face.
Speaker 1 (01:45):
And two things about the incoming CEO. As I mentioned
in the open, he's from HSBAC. He did apply for
the top job there, didn't get it. He's giving everyone
who applies for a promotion gets passed over some hope
that they'll get an even better gig. And look, Adam,
what could be better than getting to move to the
greatest city in.
Speaker 2 (02:05):
The world, Melbourne. Can you tell us a little bit.
Speaker 1 (02:08):
About Nuno and his background and some of the key
challenges he's going to face on day one at A
and Z.
Speaker 3 (02:16):
Yeah, so an Z chair Paula O'Sullivan said he was
spoilt for choice really, and maybe that's a bit of
pr spin on their part, but they clearly did have
a number of good candidates on the plate. They've decided
to go with Mattos. And he does have quite an
interesting and distinct and unusual background that isn't very common.
Speaker 4 (02:37):
So the first of those is that you know.
Speaker 3 (02:40):
He has this wholesale and retail banking background, two very
important areas for A and Z. So he's run HSBC's
Mexico business. He also ran the HSBC business in London,
that the British arm of HSBC, and of course before
that he held a number of senior roles at Banco
(03:03):
Santander that the Spanish bank.
Speaker 4 (03:05):
As well.
Speaker 3 (03:06):
His own personal characteristics and history are also quite unique.
His grandfather came from India and moved to Mozambique in
his thirties. He met his wife in Peru and one
of his kids was born in Spain.
Speaker 4 (03:22):
The other one was born in Brazil.
Speaker 3 (03:24):
So clearly a lot of international flavor for someone who's
going to have to uproot his life and move from
most recently being in Hong Kong to Melbourne having not
lived in Australia before. So clearly this was a way
for A and Z to take advantage of some of
that talent that fell out of HSBC on the back
(03:47):
of that reshuffle with a new CEO there earlier this month.
He was a contender for that top job. That was
very clear and we have reported that in the past.
So there is a sense that once A Z knew
that he had become available because he wasn't going to
get that job, and he did move reasonably quickly into
into front running for the job at A and Z.
(04:10):
So yeah, this twin kind of experience of wholesale plus
retail is also what you got from a lot of
analysts who are reacting early this week to the appointment.
So see that is a really good background to kind
of move on with some of the big projects that
he's going to have to tackle when he gets his
feet under the desk.
Speaker 5 (04:30):
A and Z.
Speaker 2 (04:31):
It's quite a unique combination.
Speaker 1 (04:33):
Let's have a listen now to what Mattos himself said
about his new job on Monday.
Speaker 5 (04:39):
Personally, I must confess it's a very emotional moment to me. Right,
this is if you want, this is a moment where
you feel you achieve your dreams, you'll deliver your personal
goals after a long career where I feel like I
worked very hard, and being granted the leadership or project
of this caliber feels very very special. So I am
(05:03):
very very excited, Adam.
Speaker 1 (05:05):
One of the most important jobs of a board is
to appoint the CEO. What are the risks of appointing
an outsider as A and Z have done with Matos?
Speaker 2 (05:17):
Is it typical for a big four.
Speaker 1 (05:18):
Bank to go to someone external rather than from promoting within.
Speaker 3 (05:23):
In a sense, it's not that unusual, but if you
look at recent history then it does look a little
bit different to what some of A and Z's competitors
have done. In Australia National Australia Bank, for example, their
new CEO, Andrew Irvine, was an internal promotion. He had
run their business bank for a number of years and
they've recently elevated him to CEO. And similarly at Westpac,
(05:46):
Anthony Miller, who's a former Goldmanner who's now about to
become CEO of Westpac. He was also running a very
key division at Westpac and was an internal move, so
it is different in that sense relative to those two
exam but it's been very well telegraphed that A and
Z have been looking widely and very globally for this appointment.
(06:10):
So I do think it's fairly crucial that they've actually
ended up going with that strategy, and I wasn't surprised
that they've gone with an outsider. I think a lot
of people in the market weren't surprised that they decided
to go with that approach. That's really what they've been
hinting at when they've been kind of making noises about
succession planning in recent months. And it's not a reflection
(06:31):
of a lack of internal talent. In fact, quite the contrary.
They do have some great people running in the big
businesses at A and Z, but they just wanted that
extra global flavor. It's the one thing that separates A
and Z somewhat that institutional business and that kind of
Pan Asia business that's still very important growing in China,
growing in places like India, they do need that international
(06:55):
sense of scale and experience, and I think that was
a key attribute that Mattos prought to the table.
Speaker 1 (07:01):
And that obviously leads me to the question about who
has missed out on this top job.
Speaker 4 (07:08):
Well, I do think it's really crucial to look.
Speaker 3 (07:10):
For Humatos ends up bringing in as his senior management team,
and whether that's new people from outside and he brings
those in, or whether that's people who are already in
senior positions at A and Z which he agrees to
hold on to and to keep to keep in key positions.
So I think Malee Carnegie, who's run the retail band
(07:32):
ZED for a number of years now. She's been muted
as a contender for potentially having been a replacement for
Elliott in the past, so let's look out for what
happens with her role in her future. But also Antonia Watson,
who is the CEO for A and ZED in New Zealand.
(07:53):
She'd also kind of been well thought of in the
running for the top job, so let's keep an eye
there on on whether she's brought into the frame under
the new CEO. But then, of course, third, it was
also Mark Wheelan, who I think it's worth mentioning because
Mark's been there for a long time. He runs the
(08:13):
institutional bank, which is the area of the bank that's
really gone from strength to strength under his leadership. It
had a really low r awe. He was really struggling,
and he's really turned that around. He's really ramped up
the profitability at that bank. They had record revenues last
year and it's a really strong area of growth.
Speaker 4 (08:32):
Now. Of course, there.
Speaker 3 (08:33):
Is that tarnished element of Wheelan presiding over the years
come to discover some months around problems in that market's unit.
So you've had the allegations of potential market manipulation of
bond traders there. You've also had the kind of the
misconduct and misbehavior including some you know people in the
(08:58):
on the trading floor that would drinking on the job.
That's been very well publicized this year. So you know
what Wheeland's future is against that backdrop of having done
really well on the business side, but also some of
the some of the pr not looking too good and
the optics there. So so yeah, certainly watch out for
for how Wheeling places in this in this in this
(09:20):
next phase. But also worth mentioning that Paul O'Sullivan, the
A and Z chairman, was very clear to kind of
hint on on Monday that you know they will be
doing more on this non financial risk management element as
he calls it so that that is all these things
around the allegations of things that went wrong in the
(09:41):
markets unit. So I do feel like there's more to
come quite soon on that. Whether we'll get that before
you know, the AGM next week or whether that's something
for the first quarter of next year hard to know,
but I think that's certainly a big element to look
out for more news on what they're doing there.
Speaker 1 (09:59):
Let's take a listen to Shane Elliott. He was on
Bloomberg TV back in September and was talking about the
bank's raft of issues recently.
Speaker 2 (10:09):
Let's take a listen.
Speaker 6 (10:11):
Well, these are pretty serious allegation that we're working them
through as a board. As you would imagine, we're dealing
with our regulators. There's a long way to go in
terms of our regulators completing their investigations where we can.
We've already taken action around some of those areas, but
there's a long way to go, as I see it,
and we'll work positively and constructively with essek Adam.
Speaker 1 (10:29):
So at the end of the day, how has it
unraveled for Elliott in this final chapter of his career
at ayan Z. What is his legacy going to be
is the last twelve months of allegations around bond market manipulation,
misbehaving traders. Is that going to overshadow all of the
(10:50):
other things that he's done during his time at A
and Z, including the sun Coop acquisition which was which
was a big one, right.
Speaker 3 (10:57):
Yeah, absolutely, I don't think you can ignore that the
severity of what's happened in terms of some of the
problems in the markets unit, and of course Elliott's own
compensation has been hit by that. We learned a few
weeks ago in the firm's annual report about how he
took a cut of more than a million dollars to
his own compensation as a result of some of those
(11:18):
things that have been going on.
Speaker 4 (11:19):
So clearly there is that, But I.
Speaker 3 (11:21):
Mean, if you look more broadly and more longer term,
he's been in the CEO role for nine years, and
before that was in very senior management jobs at the bank.
He's been at the bank a long time, and a
lot of his career really speaks of tremendous success quite frankly,
And I mean you mentioned the Sun Corp deal, I
(11:41):
mean buying such a massive piece of m and A
bringing on all these new customers, which is really a
story about growth in Queensland, big fishing growth, great sense
of growth in that area of Australia, which could be
by a returning business for them if they get the
integration right, and of course that's going to be a
(12:02):
big thing for Matos. But clearly the legacy that Elliott
leaves is having got Bill done. You know, it went
through the courts and almost at one point you thought
it wasn't going to get done and then it got overturned.
Speaker 4 (12:13):
So I think that's important to note.
Speaker 3 (12:16):
But of course twenty twenty four and the bank coming
into twenty twenty four having had a you know, really
blowout profit number last year and a sense of real optimism,
there's just that kind of dark cloud that's ended his
nine year position at the top of the bank that
I think just kind of leaves that that little stain.
But of course an Z have been very clear. They've
(12:38):
apologized for the for the bond trading reporting error that
they that they said sorry for. Elliott's personally apologize for that,
and they're continuing to hold the line that they don't
see any evidence of any market manipulation. The ACIC investigation
is ongoing the security his regulator continues to look at that,
(12:58):
but we're still maybe some time away from them actually,
you know, giving us more information on what's happened there.
So I think just look at the long term and
my senses that he will be remembered very fondly by
not just an ZED staff but also a ZED shareholders.
Speaker 1 (13:16):
And when we come back, let's take a look at
what the outlook for Australia's banking sector looks like.
Speaker 2 (13:22):
For the year ahead.
Speaker 1 (13:28):
And welcome back to the Bloomberg Australia Podcast. You're with
me Rebecca Jones, and I'm joined by Bloomberg Sydney based
finance editor Adam Haig about the changing of the guard
at A and z Adam So, with the appointment of Mattos,
it means that three out of our biggest four banks
have new CEOs heading into twenty twenty five. Who would
(13:51):
have thought what is the outlook for bank stocks in
Australia at this point?
Speaker 2 (13:56):
What's the street telling you?
Speaker 4 (13:58):
Well, I mean you just have.
Speaker 3 (13:59):
To look at the performance of some of these stocks
really over the last year. You know. Obviously the caveat
there is that future performance is no indicate past performance,
no indicator of future performance, but just give you the
sense of how well these stocks have done. So through
the Friday close last week, an Z is up twenty percent,
so it's been it's the laggard, but it's still a
(14:20):
material increase in the share price. National Australia Bank up
twenty six percent, Commonwealth Bank up forty percent, and West
Back up forty three percent. And of course that's without
even including dividends. So if you throw the reinvested dividends
into their shareholders have had very good performance.
Speaker 4 (14:38):
In bank stocks in Australia.
Speaker 3 (14:40):
Now, of course, bank stocks around the world have had
a very good year. We've had a sense from the
Federal Reserve in the US that maybe interest rates won't
be as won't be coming down as quick as people
might have thought a few months ago, and that kind
of slightly more benign economic environment does feel supportive for
bank stocks.
Speaker 4 (14:59):
But I think if you look at.
Speaker 3 (15:00):
The situation in Australia and you look at the sense
of what the market is thinking about what might happen
next year and how that would impact bank profits, it's
fairly easy to create, you know, a reasonably good argument,
a thesis based on that benign economic environment. Absolutely, real
(15:21):
uptick in the unemployment rate in Australia means that inflation
is relatively in check and the jobs market is steady,
so interest rates may not move that much and in
which case there won't be additional pressure on net interest margin.
You know, the key gauge of profitability at banks. Banks
will continue to be able to eke out profits. It'll
(15:42):
continue at places like A and Z to be a
supportive environment to onboard and integrate Sun Corp and all
the staff involved with that deal. So you could potentially
have a situation where bank stocks continue to do reasonably
well into next year. Now, of course, if we have
a big uptick in the jobless rate in Australia, then
(16:04):
that might significantly change the pricing for interest rates and
then you might see a bit more pressure on margins
and so forth. But I think at the moment, if
you look at what market pricing is telling you, the
setup for investors and for bank stocks is reasonably solid.
Speaker 1 (16:21):
And finally next week we've got the A and Z
AGM happening. Are you expecting any fireworks to come out
of that one?
Speaker 3 (16:29):
Well, I think we should be on the alert for
some more information. As I mentioned earlier, O'Sullivan Z chairman
suggesting that we might have more to come out on
this element of what the bank is doing to improve
this some of these things that have gone wrong at
(16:49):
the bank, and of course the regulator has slapped this
additional capital requirement on the bank, so investors are still
keen to see demonstrable evidence of what the bank is
doing to improve risk management in these areas. So there's
maybe a sense that we get a little bit of
that either before or at the AGM, or maybe that
(17:10):
runs into next year. But I think, you know, given
what Elliott's been through this year, and given the last
few months of just how much A and Z have
been in the press, there could well be you know.
Speaker 4 (17:23):
An interesting few things go. Maybe not fireworks, but be
worth watching.
Speaker 2 (17:29):
We'll certainly be following along. Adam.
Speaker 1 (17:31):
Thanks for joining me, and thank you for listening to
the Bloomberg Australia podcast. I'm Rebecca Jones. This episode was
recorded on the lands of the Rovendery and Gettigal people
of the callin Aniurination. It was produced by Paul Allen
and edited by Chris Burke and Ainsley Chandler. Don't forget
to follow and review the show wherever you get your podcasts,
(17:52):
and sign up for Bloomberg's free daily newsletter, Australia Briefing.
Go to bloomberg dot com to subscribe.
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