Commonwealth Bank of Australia chief executive-elect Ralph Norris is the right man for the job, but will be tested by the slowing Australian housing market and the continuing need to cut costs.
That's the view of the financial community across the Tasman and the business press on the appointment of
the Air New Zealand chief executive to the top transtasman banking job.
Norris, 56, was front-page news yesterday in the Australian and Australian Financial Review, while his appointment was prominent in the business pages of the Sydney Morning Herald.
The Australian headlined its story: "Which foreigner? Kiwi to be new Commonwealth Bank boss", a play on the CBA's "Which New Bank" restructuring programme.
Norris, who was formerly the head of the CBA New Zealand subsidiary ASB, will get a A$7.6 million ($8.18 million) package, made up of A$1.9 million in base salary, A$1.9 million cash incentive and an initial allocation of A$3.8 million in shares.
He is the second foreigner in a week to take charge of one of Australia's top-10 companies, after Telstra named American Sol Trujillo as its chief executive.
Matt Williams, who manages US$7.4 billion ($10.4 billion) at Commonwealth Bank's largest shareholder, Perpetual Investments in Sydney, expressed a sentiment typical of financial observers.
Williams said the appointment was "very positive" and highlighted Norris' success leading Air New Zealand back from the brink of collapse after its failed acquisition of Australia's Ansett.
But Williams warned the slowing Australian housing market would lead to higher bad and doubtful debts.
Meanwhile, competition with rivals such as National Australia Bank and Westpac would remain intense.
"The banks have had a golden run over the last decade so to drive Commonwealth forward it will be interesting to see his vision to keep the bank going, but he certainly has the track record to give you hope that he can do it," Williams said.
Analysts at ABN Amro bank made much of his likely extension of the CBA Which New Bank initiative.
This is a strategy Norris pioneered when he was at ASB and is aimed at simplifying processes at CBA's 1016 branches. It aims to save A$620 million this year and A$900 million in 2006.
"Given his successful 10 years [at] ASB, he is clearly a good leader with the benefit of a strong understanding of the inner workings of CBA,"ABN Amro said.
Robert Gottliebsen in the Australian said Norris was "a brilliant choice" while Sydney Morning Herald columnist Alan Kohler said inevitable moves to shift functions such as call centres to low-wage countries would be a big challenge.
- STAFF REPORTER, AGENCIES
Ralph Norris
Commonwealth Bank of Australia chief executive-elect Ralph Norris is the right man for the job, but will be tested by the slowing Australian housing market and the continuing need to cut costs.
That's the view of the financial community across the Tasman and the business press on the appointment of
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