Bank of America Merrill Lynch exec to join NAB

The incoming head of finance and strategy may become a contender for the bank's top job.

Owen Raszkiewicz

Owen Raszkiewicz is a Motley Fool Contributor. Owen has been a Contributor since 2013, having also spent time as a Fool writer/analyst. He also worked as an Investment Analyst at Zenith Investment Partners, Australia's top research house specialising in managed funds. Owen has appeared on Channel 10's The Project and was invited on the BBC. He holds a Masters of Applied Finance, Masters of Financial Planning, Bachelor of Technology, Advanced Diploma of Financial Services and Diploma of Mortgage Broking Management. In addition, Owen has passed Level 1 of the Chartered Financial Analyst (CFA) Program. He has taken the Banking + Finance Oath (BFO). When he is not writing, Owen is Managing Director of Rask Finance, an Australian financial education company. You can email him: [email protected].

Published July 25, 2013 11:30 am AEST

The market responded positively to National Australia Bank's (ASX: NAB) plan to bring Bank of America Merrill Lynch chief executive and country head Craig Drummond down under, to take charge of the finance and strategy role of the company.

Mr Drummond told The Australian "I feel very good about being able to leave Bank of America Merrill Lynch at a time when it's in very good shape". Although he won't be receiving a position on the board, many believe he could be the successor of current CEO Cameron Clyne.

Mr Drummond must also forfeit over $6.5 million in deferred employment incentives from his current employer. However, NAB has said it will compensate him in cash and equity.

Other possible new bosses include Gavin Slater, head of personal banking, Lisa Gray, head of operations, and Joseph Healy, who is in charge of the nation's biggest business bank. Although Mr Clyne would rather an internal appointment of the new CEO, the strategy to appoint a new chief rests solely with him.

Bringing in an external leader could also be good for the bank. It'll provide the newcomer with an opportunity to transform the bank and rid it of a history of underperformance. Mr Clyne said that Drummond, former chief operating officer of Goldman Sachs JBWere, would be a "strong addition to our leadership team".

Foolish takeaway

NAB could do with a transformation of its business, and perhaps an experienced outsider can bring something new to Australia's fourth biggest bank. Compared to the Commonwealth Bank (ASX: CBA) and ANZ (ASX: NAB) NAB is not as appealing to investors, particularly when you take into account its accident-prone history. With little growth on the cards, NAB is fully priced or perhaps even a little overpriced although its 9.0% (once franked) dividend is very appealing to income investors.

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Motley Fool contributor Owen Raszkiewicz owns shares in ANZ.

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