(Bloomberg) -- ANZ Group Holdings Ltd.’s new chief executive officer will face a long list of challenges when he takes up his role at Australia’s second-largest lender by assets next July.
Nuno Matos, the former HSBC Holdings Plc wealth chief who was named on Monday to replace Shayne Elliott, will need to appease regulator probes, integrate the company’s biggest acquisition on record, and eke out profit from an increasingly commoditized lending market.
But first up for the Portuguese native will be getting used to the banking landscape in Australia and New Zealand, according to UBS Group AG analysts.
Matos will bring “a fresh perspective and a clean slate” to ANZ, UBS’s John Storey and Sarah Cornwell wrote in a note. He will “make the necessary changes to the group’s operating model, drive an improved stakeholder outcome and introduce new ideas.”
More than 120 of ANZ’s most senior bankers in Melbourne may get a glimpse of those ideas when they meet with Matos, 57, later Monday. As someone whose career has spanned roles around the world at Spain’s Banco Santander SA as well as HSBC — he signaled a willingness to persist with ANZ’s mix of both international and domestic banking.
“I feel it fits well with my profile,” Matos told ANZ’s internal newsletter. “I certainly said to myself, ‘I would love to be part of this journey.’”
Matos was head of wealth and personal banking at HSBC but missed out on the top job earlier this year, leading to a departure after nine years that made him one of the world’s most eligible bankers. On his watch, the unit’s pretax profit more than tripled to $11.5 billion in 2023.
The past years also saw Matos at the heart of HSBC’s strategy to continue its pivot toward Asia, including working on several of the company’s bolt-on acquisitions of wealth and insurance businesses in the region.
His appointment by ANZ comes as two other top Australian lenders also recently named CEOs, with Andrew Irvine taking the helm at National Australia Bank Ltd. and Anthony Miller at Westpac Banking Corp.
Shares of ANZ fell 3.1% as of 2:32 p.m. in Sydney, paring this year’s gain to 16%. That’s less than the 32% advance of the S&P/ASX 200 Financials sector gauge.
News of an orderly CEO transition addresses one source of uncertainty for ANZ, according to Morgan Stanley analysts, led by Richard Wiles. Matos should focus on non-financial risk issues and manage any potential changes in the executive team, he wrote in a report.
“We believe the appointment of a retail banker with global experience highlights ANZ’s need to strengthen its retail franchise and competitive position,” Wiles wrote. “ANZ faces a full agenda in 2025 and a pivotal period over the next few years.”
Elliott, 61, is retiring after nine years that culminated in a tumultuous ending.
Scandals at ANZ involving trading misbehavior and allegations of bond market manipulation led to senior executives taking compensation cuts earlier this year, including Elliott. Australia’s prudential regulator has slapped it with higher capital costs and both sides are waiting on an external legal report to remedy the penalty while the securities watchdog also investigates the trading.
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“This decision is not about governance issues or any of the reported issues, it’s actually about talent,” ANZ Group Chairman Paul O’Sullivan said on a call with reporters on Monday. “If a player comes on the transfer market, you’ve got to be willing to move, otherwise a competitor is going to seize the moment.”
Tall, brusque, and energetic, with an undiminished New Zealand accent, Elliott pushed to update the bank’s technology offering with budgeting and loan approvals through its phone app ANZ Plus. Then, foreseeing regulation and competition making banking profits contingent on scale, he struck the A$4.9 billion ($3.1 billion) takeover of regional peer Suncorp Bank Ltd. — leaving Matos the task of integrating the company.
O’Sullivan said the board had assessed multiple external and internal candidates and the appointment was the culmination of long-term systematic work.
“Nuno Matos appears to bring extensive international experience, offering fresh perspectives as ANZ navigates the integration of Suncorp Bank and advances its strategic goals,” said the Australian Shareholders’ Association, an advocacy group for individual investors. “The absence of an internal successor highlights the complexities of long-term succession planning and maintaining a strong leadership pipeline.”
Before the scandals, institutional banking head Mark Whelan had been considered a top internal candidate for CEO. Others who have missed out include CEO of the bank’s New Zealand operations Antonia Watson and former Proctor & Gamble and Google executive Maile Carnegie, who leads the retail bank, ANZ’s largest arm.
Matos will receive a salary of A$2.5 million, the same as Elliott, according to a statement. On top of that will be a short-term bonus target of up to 80% of that and a long-term award of up to 135%.
Australian banks have become simpler institutions in recent years and that brings its own challenge for Matos, said Hugh Dive, chief investment officer at Atlas Funds Management in Sydney.
“You’ve got four to five players selling a relatively undifferentiated product,” he said. “They’re just very back to basics with business lending and home lending and there’s fewer ways to make money.”
--With assistance from Ainsley Thomson, Amy Bainbridge and Adam Haigh.
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