Mirvac surprises with Mulcahy

The new Mirvac chairman had a less than stellar run at Suncorp Metway.

Let's hope John Mulcahy makes a better chairman than chief executive or that he at least has learnt the perils associated with ambitious expansions.

A Mirvac (MGR) director for some time, Mulcahy has been elevated to the chair, replacing the long serving James MacKenzie.

But his last role as an executive, running Suncorp (SUN) Metway, was mired in controversy up to and including the size of his exit package when he abruptly left the Brisbane based financial services group in 2009.

Suncorp was lucky to survive the global financial crisis and only now is emerging from the aftermath of the chaos of those years, after ridding itself of its non-core banking assets at a loss earlier this year (see Three blue-chip dividends under threat).

During Mulcahy's reign, Suncorp lashed out a whopping $7.9 billion on Victorian based insurer Promina at the height of the market only to watch the defection of a series of senior managers during the integration process.

But it was the decision to expand heavily into Queensland commercial property loans during 2008 – a policy the then chief financial officer Chris Skilton warned the board against – that crippled the financier.

In late 2008, the struggling bank capitulated to a bid by ANZ, which then was scuppered by the Federal Government's decision to extend government guarantees over deposits and offshore borrowings.

It survived the financial crisis only because of that taxpayer support and while vulnerable to a takeover, was rendered immune by community concern about the power of the big four.

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