National Australia Bank Ltd. (NAB), the country’s largest by assets, hired Bank of America Corp. (BAC:US)’s Craig Drummond as its group executive for finance and strategy.
He will join NAB by the end of the year and replaces Mark Joiner who retires after seven years with the lender, the Melbourne-based bank said in a stock exchange statement. Drummond most recently headed Australian operations at Bank of America’s Merrill Lynch unit, according to the filing.
Chief Executive Cameron Clyne is changing senior executives at the lender as part of his plan to boost its Australian business and shrink its U.K. unit. He is also cutting management roles to trim spending as Australian banks struggle with slow corporate loan growth.
Drummond “adds to the bench strength in NAB’s senior executive ranks,” said David Ellis, a Morningstar Inc. (MORN:US) banking analyst based in Sydney. “He obviously has many years experience in financial markets, which is a positive for NAB’s growth strategy.”
NAB shares gained 0.6 percent to close at A$30.67 in Sydney, extending gains for the year to 23 percent. The broader S&P/ASX200 index rose 0.4 percent.
Drummond, 52, who led Bank of America Merrill Lynch Australia for the last four years, joins NAB on the same pay package as Joiner and will be compensated for deferred employment incentives worth A$6.5 million ($6 million), which he will forfeit by leaving his current role, the lender said. Joiner earned total remuneration of A$3.7 million in the year to Sept. 30, 2012, according to NAB’s annual report.
“A number of years in the role will ensure he is very well positioned for a potential promotion as CEO at some stage in the future,” said Ellis. Clyne, 45, took the CEO position in January 2009.
Before Bank of America, Drummond was CEO of Goldman Sachs Group Inc.’s (GS:US) Australia unit. He spent 15 years with Goldman Sachs, NAB said.
The Australian Financial Review reported in April that NAB executive and general manager positions will be cut to 50 from 60, citing unidentified sources. Some changes have been made to the senior management team to “better align the business to the changing external landscape,” Brian Walsh, a spokesman for the bank, said at the time.
NAB’s first-half business banking profit fell 1.9 percent from a year earlier as slowing Australian economic growth curbed credit demand. The division holds a market-leading 25 percent share of Australia’s corporate lending.
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