CBA execs given chance

Top job could be an internal posting, Narev says

OUTGOING Commonwealth Bank chief Ian Narev has ridiculed as “false” the view that an internal candidate cannot succeed him as the chief of the nation’s biggest bank.

Possible leaders from within the nation’s biggest lender – such as retail chief Matt Comyn – have seen their prospects tarnished by the lender’s unfolding scandal in which it is accused of not properly monitoring major transactions through its ATMs.

But Mr Narev rejected this, saying the board had a “rigorous process” that would consider CBA executives.

“(The board) have made clear that the view that you couldn’t possibly have an internal successor is false,” he said yesterday.

“There is an internal process and an external process – you’ve got great internal candidates who could run the bank and if there is a better one externally, so much the better for everybody.”

Mr Narev last month said he would be leaving the bank by the end of the financial year, although the bank denies this is linked to the money-laundering scandal.

His comments came as the CBA revealed it was considering spinning off its $220 billion wealth management arm, Colonial First State Global Asset Management, into a separately listed entity.

At the same time it said it had bedded down the sale of its CommInsure-branded life insurance business to Asian life insurer AIA for $3.8 billion.

The developments come as Australian banks move to unwind a business strategy of combining traditional retail banking with things such as wealth management and insurance, commonly dubbed “vertical integration”.

The wealth management and life insurance businesses account for about two thirds of the profit base of the CBA’s wealth division. Hong Kongbased AIA will become the biggest life insurer in Australia after the CBA deal.

It includes a 20-year agreement that will see AIA distribute through the CBA to about 13 million customers, in which the bank will earn income from that distribution rather than the actual insurance product. Customer policies will be unaffected and the CBA will retain its general insurance business.

Mr Narev said banks were not looking at vertical integration as much as the media and politicians.

“Everyone talks about vertical integration as a big theme,” he said. “It is simply not how we think about it as a business. This is a bottom-up exercise of where we should be and what we should be good at and not a top-down exercise of ‘vertical is dead what do we do’.”

CBA revealed wealth management executive Annabel Spring would leave at the end of the year. Shares closed 0.3 per cent lower at $76.07.