In the eye of the storm

TO SWIM the notoriously windy stretch of ocean that separates the sandy beaches of Cottesloe in Western Australia from the eastern coves of Rottnest Island demands extraordinary strength, stamina and a certain daring.

Speed is not important: even the best open-water freestylers take 7 1/2 hours to plough the 20 kilometres across the Rottnest Channel. But what is essential is a doggedly rhythmic kick, and an ability to kick harder when trailed by sharks.

Funnily enough, it's the same suite of skills that would be damned handy just now for anyone trying to navigate the perilously stormy waters of global financial markets. Someone like Cameron Clyne, for example.

"You don't have to be the fastest swimmer," the laconic Clyne said yesterday. "You just have to be faster than the slowest swimmer."

Ah yes, Cameron who? It's a fair enough question, and precisely what plenty of sharemarket investors, business leaders and politicians might have said earlier this week.

But now that Cameron Clyne, a strapping 1.98-metre former state-level rugby player and competitive marathon ocean-swimmer, has been confirmed as the next chief executive of NAB, he can expect to become a household name.

That Clyne is not widely known outside the bank is hardly surprising. He is, after all, only 40 years old - the youngest head of the NAB ever. On January 1, 2009, after a three-month transition, Clyne will step into the shoes of his boss and mentor, chief executive John Stewart.

Between now and October, he will tidy up across the Tasman, where for the past 18 months he has been the Auckland-based head of NAB's Bank of New Zealand, and shift his young family to a new base in Sydney, where he was born.

That Clyne has been summoned to the topmost rank of the bank after only four years inside its corridors is a surprise to some, but that he vaulted over Ahmed Fahour, the head of NAB's Australian operations, may have been a surprise to others.

Fahour, according to Stewart, "has behaved incredibly well" despite not winning the job he coveted. Read another way, it is not hard to guess that the ambitious and well-regarded Fahour will seek, and secure, a higher station outside NAB.

Close watchers of the bank, however, singled out Clyne as a potential successor as early as 2004, when at the age of 36 he was headhunted by Stewart. Without doubt, Clyne has enjoyed a stellar career. Raised in Penrith, in Sydney's western suburbs, Clyne, the eldest of three boys, attended St Dominic's College and then the University of Sydney where he obtained a bachelor of arts, majoring in economics.

While completing his studies, he worked at the now-defunct accounting and advisory firm Arthur Andersen, then joined PricewaterhouseCoopers.

Clyne told New Zealand's Dominion Post last year that as a young man, he never stood out academically, but focused instead on gaining as much work experience as he could. At the same time, his sporting prowess started to shine through.

While working for PwC in Melbourne, he represented Victoria at rugby, playing two international matches against the All Blacks and the Springboks as a second-rower who cemented himself at the base of scrums. He stopped playing rugby, but remains a passionate supporter of the NSW Waratahs.

In 1996, at the age of 28, Clyne was working in the world's biggest financial centre - New York - and was named a PwC partner, again, the youngest ever. Over the next few years, he worked variously in Sydney, Hong Kong, Tokyo and Bangkok, and by 2004, Clyne was managing partner of consulting for financial services in the Asia-Pacific region. (IBM Consulting acquired PwC's consulting business in 2002.)

What Clyne brought to NAB in 2004 was more than a decade of experience as a top-level international adviser to banks on mergers and acquisitions, strategic development, performance parameters, risk management and corporate governance.

But the quietly spoken Clyne is taking on the top job at NAB just as world financial markets are weathering their most severe buffeting since 1987. Higher US interest rates trapped tens of thousands of mortgage-holders and forced banks to write off hundreds of billions of dollars against bad loans. The contagion, which has infected almost every layer of every financial market in the world, has not yet been arrested, and some analysts are tipping the economic slide will worsen later this year.

NAB, of course, is not immune to any of this, and its shareholders were rudely shocked last week when John Stewart revealed the bank had written down to zero the value of NAB's exposure to US-dollar mortgages. That stroke of the pen added $830 million to the $181 million NAB had already set aside to cover bad debts, but what really put analysts offside was the surprise.

Analysts don't want any more surprises, especially not from NAB. They want a seamless flow of mundane news, not little bombs that blast the fine detail from their painstakingly compiled profit-and-loss models.

With $600 billion of assets and a sharemarket capitalisation of about $42 billion, NAB is a formidable business - the second-biggest Australian bank and the one that has the widest spread of international business. But it is a bank that is concerned about the direction of world financial markets, one that from here on will be determinedly conservative in how it manages its exposure to the fragile credit and equity markets.

That much is abundantly clear from the appointment of Clyne. NAB chairman Michael Chaney said what impressed him most during Clyne's selection interview before directors was his response to the inevitable question about his five-year horizon. Instead of making some ambitious forecast about how big the bank might be or how profitable under his helm, Clyne demurred.

"It fell on pretty fertile ground as far as I was concerned," Chaney told reporters. "You could not forecast the future of the world with great accuracy."

So while candidates might say all the right things about taking advantage of opportunities while the bank has a strong balance sheet, NAB does not want someone who is going to spruik acquisitions to the board in the belief that they, above all others, have picked the bottom of the economic cycle.

Chaney believes that, in that respect, Clyne brings a wisdom beyond his years to the job and a clear-headed sense of reality.

The reality for all banks these days, however, is that nothing is predictable when world markets are so fragile, and Clyne and NAB directors are acutely aware of this. Still raw is the memory of four years ago when NAB dumped chief executive Frank Cicutto and imported Scotsman John Stewart to turn around its devastated reputation.

What Stewart took on was an unquestionably difficult challenge. NAB's credibility among professional investors and smaller shareholders was shot; it was in dispute with just about every regulator that governed its business - and there were many; it had just uncovered $360 million of losses arising from fraudulent foreign exchange transactions; staff morale was rock-bottom, and it had endured a debilitating and highly public boardroom dispute that ultimately forced out more than half the directors.

Stewart initially agreed to a one-year challenge, which turned into four. He is leaving now because the bank is, undoubtedly, more stable. But he sees new challenges that need to be tackled by fresh hands.

"It's the position we're in just now," Stewart says. "The economic situation (is) getting worse. I think it's going to go on for the next two years maybe. So the issue is, do I stay around for another two years? I'm getting on - I'm getting so old I don't buy green bananas any more. You're going get to a point where you move on."

Like his mentor, Clyne is coming to a bank that faces enormous change, but this time not of its own making. The global financial markets are shaking out risky elements and rebalancing, often with alarming jolts. But Stewart believes Clyne has inherited a stable bank at NAB with a strong balance sheet and committed, loyal staff.

Clyne agrees. It took a long time to get him to talk about himself when he fronted reporters yesterday. He wanted instead to talk about that wonderful team he had inherited and how he intended to build on that. But it was the stuff that makes brains sag and mouths dry.

Perhaps he'd endured a touch too much media-training. But Michael Chaney put it another way. One of the things Stewart and Clyne had in common, Chaney said, was that their egos were in check "and in Cameron's case that comes through in spades".

That was important because "there are so many occasions for a chief executive where, if you're burdened by a big ego you're influenced to take an action that protects yourself and your reputation rather than what's in the interests of the organisation".

"And I'm very confident that that's not going to be a problem with Cameron," Chaney says.

CAMERON CLYNE

BORN

1968 in Penrith, western Sydney

EDUCATION

St Dominic's College, Penrith; BA economics and political science at University of Sydney and worked part-time as a financial consultant for Arthur Andersen.

FAMILY

Married to Melinda with two children.

INTERESTS

Ocean swimming and rugby. Played rugby union and represented Victoria in the early 1990s. "I am passionate about my family, I am passionate about the Waratahs maybe eventually winning a Super 14."

CAREER

At 28 he became the youngest partner at Price Waterhouse (now PricewaterhouseCoopers). He was based in Asia and New York. He was also a consultant for IBM.

2004: Joined NAB to rebuild the bank following its foreign exchange trading scandal.

2006: Moved to the office of the chief executive, becoming CEO John Stewart's right-hand man while taking a broader role in strategy, mergers and acquisitions.

March 2007: Appointed chief executive of Bank of New Zealand.

April 2008: One of two Australians chosen as a young global leader by the World Economic Forum.

31 July, 2008: NAB announce Clyne is to succeed NAB chief Stewart in January 2009.