RETAIL BANKING | Tony Chua, Australia

Commonwealth Bank's new CEO may set eyes abroad for growth

The low-growth outlook for domestic banking seen to have caused Ian Narev’s appointment.

The Commonwealth Bank's surprise selection of Ian Narev as chief executive-elect could mean the CBA board is looking for new growth opportunities in offshore banking and global asset management, according to analysts.

CBA chose 44-year-old Mr Narev, who has a strong background in strategy, ahead of retail banking boss Ross McEwan, 54, who was regarded as the more likely successor to Ralph Norris.

However, UBS said in a note that Mr Narev's elevation could be explained by the board's recognition of the low-growth outlook for domestic banking.

"We believe that the board may view the status quo as no longer sufficient in a low-growth domestic banking environment, and it may be looking to Ian Narev to drive additional avenues of growth," analyst John Mott said.

Mr Mott said the agenda could include improvements in CBA's institutional banking position, cost savings through re-engineering of internal processes, and selective international expansion in banking in Asia, as well as global asset management.

Mr Narev has two master of law degrees and was a global partner in McKinsey & Co, where he was co-leader of the strategy practice in Asia and a consultant in financial services.

View the full story in The Australian.

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