Banking News

CBA Executive Team Restructure and Wealth Demerger

(25 June 2018 - Australia) CommBank CEO Matt Comyn announced six appointments to the group’s executive leadership team aimed to streamline and simplify the bank’s structure following the decision to demerge the group’s wealth management and mortgage broking businesses. 

ANZ’s former head of institutional banking, Nigel Williams, has been appointed CRO and will join CBA on 5 November this year.  CBA’s former general counsel and current CRO, David Cohen, will become deputy CEO from 5 November and Angus Sullivan will lead the retail bank as CBA’s group executive of retail banking services, which will now include Bankwest. Pascal Boillat has been appointed group executive enterprise services and CIO. Sian Lewis has been appointed group executive human resources and Andrew Hinchliff has been named group executive for institutional banking and markets. “This team will be critical to continuing the changes and improvements we need to make to earn the trust of our customers and the community and build a better bank for the future,” he said.

CBA will demerge Colonial First State, Colonial First State Global Asset Management (CFSGAM), Count Financial, Financial Wisdom, Aussie Home Loans and CBA’s minority shareholdings in Mortgage Choice and CountPlus into the new entity CFS Group. The bank does not plan to hold a minority shareholding in the CFS Group following the demerger with the separate listing on the ASX is intended for the group to have the “ability to pursue its own growth strategies”. In a statement, the bank said that the demerger of CBA’s wealth management and mortgage broking business will “provide investors with a direct investment in a leading independent wealth management company made up of a diversified and complementary set of businesses”. CBA said that the CFS Group therefore offers investors a company with a strong earnings base, with pro forma 2017 NPAT of over $500 million and “a strong capacity to pay franked dividends”.  John Mulcahy will be chairman for the CFS Group as the search for the new CFS Group CEO commences.

The bank has said that the decision, as well as its strategic review of its general insurance business, CommInsure General Insurance, including a potential sale, will enable CBA to “enhance its focus on its core banking businesses in Australia and New Zealand and create a simpler, better bank”. “Today’s announcement is another step in our stated priority to become a simpler, better bank and has followed a thorough review of the group’s businesses and its optimal organisational structure to drive growth and shareholder value for all businesses. It also responds to continuing shifts in the external environment and community expectations, and addresses the concerns regarding banks owning wealth management businesses,” Mr Comyn said. “The ability to provide high-quality banking services and in-house financial advice to CBA customers will remain fundamental to CBA’s focus on customers’ financial wellbeing and we will deliver that through a new model for advice that is safe, simple and scalable,” Mr Comyn said. Further strategic details will be disclosed during the bank’s August 8 full year results announcement.