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14th Jun 2005, 08:37
Commonwealth Bank of Australia has named former banker and Air New Zealand chief Ralph Norris as its next chief executive.
Norris will replace David Murray, who has been chief executive of the Commonwealth for 13 years since joining the then government-owned bank as a teller in the 1960s, later this year.
Murray was expected to retire when his contract expired in the middle of next year, at the same time as a three-year restructuring programme, dubbed "Which New Bank?", is completed.
Audio and Video
Norris' Airline Legacy - 14/06/2005 06:25 PM - Aviation analyst Tom Ballantyne tells Newstalk ZB's Larry Williams Air New Zealand is in much better shape at the end of Ralph Norris' time at the helm than it was when he took it on. Play
Requirements
Norris, who was the managing director of the Commonwealth's New Zealand operation, ASB Bank Ltd, for 10 years, is the top executive of airline Air New Zealand Ltd.
"The timing is good," said Craig Young, an analyst at Tyndall Investment Management. "They've got someone in place six months before Murray leaves, rather than six months after.
"ASB is the really good performing part of the Commonwealth Bank. The whole 'Which New Bank' programme is based on ASB's approach. It's very much a customer focus."
Audio and Video
Air NZ Chief Quits - 14/06/2005 01:02 PM - Outgoing Air New Zealand chief Ralph Norris talks to Newstalk ZB's Leighton Smith about his decision to move on. Play
Requirements
Murray presided over steady growth in the bank's share price and dividend. The shares touched a record A$38.51 on June 9, and Commonwealth now ranks above rival National Australia Bank as the country's biggest bank by market value.
Shares in the Commonwealth edged up 0.5 percent to A$38.50 in early trading on Tuesday before dipping 0.1 percent to A$38.21 by mid-morning, in line with its major rivals.
The stock has risen about 19 percent so far this year, well ahead of a four percent rise in the overall market and gains of up to 7 percent by its main rivals.
The main challenges for Norris, who has to give six months notice to leave Air New Zealand, is to tackle the Commonwealth's public-service culture and improve its low-value customer base, said Tyndall's Young. "It has a large market share and low-value customers," he said. The Commonwealth has the biggest share of mortgage and deposit markets in Australia.
Commonwealth chairman John Schubert said Murray had suggested that with the restructuring programme, which has involved job cuts and improving technology to boost product sales and customer services, on track, a handover at this stage would give the new chief executive time to develop a strategy for beyond June 2006.
Australian banks have benefited from an economy in its 14th year of growth and unemployment at a 28-year low, fuelling demand for credit and keeping bad debts low. But the housing market has cooled as the central bank lifted interest rates to 5.5 percent.
Competition has also increased. Foreign banks and non-bank lenders are challenging local banks with aggressive retail deposits and offering credit cards with lower interest rates.
Norris will replace David Murray, who has been chief executive of the Commonwealth for 13 years since joining the then government-owned bank as a teller in the 1960s, later this year.
Murray was expected to retire when his contract expired in the middle of next year, at the same time as a three-year restructuring programme, dubbed "Which New Bank?", is completed.
Audio and Video
Norris' Airline Legacy - 14/06/2005 06:25 PM - Aviation analyst Tom Ballantyne tells Newstalk ZB's Larry Williams Air New Zealand is in much better shape at the end of Ralph Norris' time at the helm than it was when he took it on. Play
Requirements
Norris, who was the managing director of the Commonwealth's New Zealand operation, ASB Bank Ltd, for 10 years, is the top executive of airline Air New Zealand Ltd.
"The timing is good," said Craig Young, an analyst at Tyndall Investment Management. "They've got someone in place six months before Murray leaves, rather than six months after.
"ASB is the really good performing part of the Commonwealth Bank. The whole 'Which New Bank' programme is based on ASB's approach. It's very much a customer focus."
Audio and Video
Air NZ Chief Quits - 14/06/2005 01:02 PM - Outgoing Air New Zealand chief Ralph Norris talks to Newstalk ZB's Leighton Smith about his decision to move on. Play
Requirements
Murray presided over steady growth in the bank's share price and dividend. The shares touched a record A$38.51 on June 9, and Commonwealth now ranks above rival National Australia Bank as the country's biggest bank by market value.
Shares in the Commonwealth edged up 0.5 percent to A$38.50 in early trading on Tuesday before dipping 0.1 percent to A$38.21 by mid-morning, in line with its major rivals.
The stock has risen about 19 percent so far this year, well ahead of a four percent rise in the overall market and gains of up to 7 percent by its main rivals.
The main challenges for Norris, who has to give six months notice to leave Air New Zealand, is to tackle the Commonwealth's public-service culture and improve its low-value customer base, said Tyndall's Young. "It has a large market share and low-value customers," he said. The Commonwealth has the biggest share of mortgage and deposit markets in Australia.
Commonwealth chairman John Schubert said Murray had suggested that with the restructuring programme, which has involved job cuts and improving technology to boost product sales and customer services, on track, a handover at this stage would give the new chief executive time to develop a strategy for beyond June 2006.
Australian banks have benefited from an economy in its 14th year of growth and unemployment at a 28-year low, fuelling demand for credit and keeping bad debts low. But the housing market has cooled as the central bank lifted interest rates to 5.5 percent.
Competition has also increased. Foreign banks and non-bank lenders are challenging local banks with aggressive retail deposits and offering credit cards with lower interest rates.