Mr Fixit brings his own recipes to ANZ

Westpac 'defector' reveals his plans to set things right. Eric Johnston reports.

Heading into ANZ's Melbourne headquarters for the first time on a warm November morning last year, Phil Chronican realised there was a problem.

A near three-decade veteran of ANZ's longtime arch rival Westpac, Chronican's collection of ties were either red, or a least had enough red in them that would get people thinking of the bright red "W" of the Westpac logo rather than the blue of his new bank.

This prompted an unscheduled stop to the Collins Street outfitter Henry Bucks.

"I had to take the first three blue ties I saw," Chronican recalls.

But this, say those that have worked with Chronican, 54, is typical of the detail he brings to banking.

Nothing is left to chance.

Chronican is widely credited as a key figure who alongside former Westpac boss David Morgan steered the bank out of its near-collapse in the early '90s after a property lending spree blew up as the economy fell into recession.

Now running ANZ's vast Australian business, but as Westpac's former institutional boss and its one-time chief financial officer, Chronican was also regarded as helping to steer that bank through the global financial crisis. Indeed, going into the crisis Westpac had one of the cleanest lending books among the big global banks.

Enter ANZ, which has a long history of being more entrepreneurial as well as a culture driving the bank for the bottom line, rather than safety.

This has led to a series of stumbles over the year. While not life threatening, they have lost investors hundreds of millions of dollars and sometimes, as in the case of margin lending to Opes Prime, caused a reputational battering.

Chronican acknowledges he is a product of the the turmoil and deep losses that swamped Westpac from 1991 and says he can bring "strategic discipline" in his new role as ANZ's Australian chief executive.

"That conditions you to what extreme risks look like," he says. "You take a critical eye to things that look attractive on the surface.

"People shouldn't be surprised that Westpac had no complex derivatives or unusual investments or those sorts of things. We were strong believers in sticking to the core business and growing it and not getting distracted by things at the margins."

He notes that ANZ group chief executive Mike Smith has also warned of the dangers of "cottage industries" that often grow up inside banks during booms.

Smith, a former top HSBC banker, has said these side projects distract from the "main game" of banking.

Analysts have labelled Chronican as Australia's most experienced bank chief executive-in-waiting. His move to ANZ also marks one of the highest-ranked defectors to a rival bank in recent years.

CLSA analyst Brian Johnson labels Chronican as a "seasoned successful banker" whole brings "credibility and respect" to ANZ.

In late 2007, Chronican was the leading internal candidate to take charge of Westpac, but was passed over for the role of chief executive for St George boss Gail Kelly.

Chronican says that after more than a decade in various executive roles at Westpac, including running its retail business, he was starting to lose momentum.

"It was difficult for me to get energised by taking on another challenge at Westpac," he says. "I left there in the middle of last year with the intention of taking a break. It was probably a shorter break than I intended."

At the time of his departure from Westpac last July, executives there were reassuring investors that Chronican would not reappear in another banking role.

Less than two months later, and during a long-planned holiday travelling the Silk Road in China, Chronican was faxing a contract back to ANZ from Xian in central China.

ANZ boss Mike Smith had only called a few days earlier with an offer when Chronican was outside Beijing and the ANZ boss was keen to move quick.

He says it was the breadth of the ANZ position that made the offer immediately attractive, particularly as just a month before he was approached, the bank had moved to take full ownership of its ING Australia wealth management joint venture. Elsewhere, the bank had serious strategic intent with regards to growing throughout Asia and this also had implications for the Australian business.

The business that Chronican is now running by far makes up the rump of ANZ.

Spanning from selling mortgages, credit cards and wealth management, Chronican also oversees ANZ's small to mid-sized business banking unit and its agribusiness operations.

The Australian business would be a top 10 ASX-listed company in its own right, delivering an annual profit of more than $2billion — 68 per cent of group earnings. Staff exceed 20,000 and the lending book tops $247billion.

Since taking charge, Chronican has regained momentum for ANZ's retail business that had been lost after its former boss, the well-regarded Brian Hartzer, moved to Royal Bank of Scotland in early 2009.

In the months following Hartzer's exit, decision-making had slowed, while insiders were starting to fear the Australian business was not getting the management attention, given the focus on Asia.

Chronican says initially a big part of his role is about explaining where Asia fits into ANZ's Australian operations.

"One of the things Mike said to me was Australia needed to be a strong, growing part of the business," he says. "It continues to be such a large part of the group in terms of profits and it is likely to be so for a long time.

"The investments in Asia in some cases will have a period of time before they pay off ... therefore its critical that Australia is a strong healthy business.

"It's important that we don't create the impression either to our own people or our own customers that somehow the Australian business is less important.

"Asia is a great growth story and it will be a significant benefit to the Australian business, but the Australian business has to succeed in its own right."

During his time at Westpac, Chronican says that he had a healthy respect for ANZ and the momentum of its retail banking business.

"Over the years ANZ had very strong brand metrics for high levels of customer satisfaction," he says.

"I've always respected the fact that a lot of work had gone into developing that — investments in the branch network, investments in the ATM network and service metrics."

Now ANZ is battling to hold its own in this space, particularly as CBA and also Westpac have spent years and made huge investments into making their retail businesses more customer friendly.

Chronican says ANZ consumer banking unit has a "good organic growth story" ahead, helped by the high levels of customer satisfaction.

"One lesson of the market over recent years is that having scale is no guarantee of success on an ongoing basis," he says.