Smith crucial to ANZ's Asia plans

AN EARLY departure of Mike Smith from ANZ would trigger a re-shaping of the lender's move into Asia, with the chief executive the driving force behind the expansion push.

AN EARLY departure of Mike Smith from ANZ would trigger a re-shaping of the lender's move into Asia, with the chief executive the driving force behind the expansion push.

A series of global reports, including in The Wall Street Journal, named Mr Smith this week as a potential candidate to replace the former Barclays boss Bob Diamond, as the British banking group searches worldwide for a CEO following the Libor rate-fixing scandal. The Barclays board is reported to prefer an external candidate.

ANZ declined to comment on the reports. There is no evidence Mr Smith, who is on annual leave, has been approached by Barclays so far.

One sticking point is that the bulk of Barclays' businesses are based in Britain and North America, with its Asian businesses generating just 4 per cent of its earnings.

ANZ is widely viewed as carrying the biggest "key-man risk" among Australia's big banks. That is, the risk of losing momentum from the exit of a top executive. This is because the bank's "super-regional" strategy is interlinked with Smith.

The ANZ chief, who was formerly the Hong Kong-based head of HSBC's vast Asian operations, has used his extensive connections to open doors for ANZ in the region. He was able to fast-track the bank's expansion in China, as well as adding to its branch network and securing a licence to provide yuan-denominated services, including deposits and loans, for Chinese citizens.

Shortly after joining ANZ, Smith set down a plan to derive 20 per cent of the bank's earnings from Asia by the end of this year. More recently, he increased that target to as much as 30 per cent by 2017.

An early exit would focus attention on the long-term succession planning at the bank. Much of this is now on Phil Chronican, the former top Westpac banker who runs ANZ's Australian operations, by far the bank's biggest business unit.

However, Smith's hand-picked Asian boss Alex Thursby, a former head of institutional banking at Standard Chartered Bank, could also be a preferred internal candidate if the ANZ board wants to continue with its Asian push.

Some say with the retirement of the former chairman Charles Goode in 2010, the board lost one of its key advocates of its Asian expansion.