NAB Combines It's Group And Divisional CEO Roles

Mr. Fahour is a highly regarded NAB executive and previously carried the responsibility for running NAB's Australian business, which accounted for more than two thirds of the group's annual profits.

Responsibility for NAB's Australian retail banking network, business banking and wealth management activities would now rest with Mr. Clyne, who formally replaces the out-going CEO John Stewart on the 1st of January. Mr. Clyne has been effectively running the group on a day-to-day basis since the beginning of this month in any case.

Today's announcement was timed to coincide with the start of NAB's annual general meeting in Melbourne and is the first major operational and management shake-up announced by the new CEO. The move raises doubts over how long Mr. Fahour will continue to stay on with NAB after missing out the race to succeed Mr. Stewart.

Mr. Fahour, a former senior investment banker, was recruited by Mr. Stewart nearly five years ago to help overhaul the group's operations and restore its Australian business to a leading role following a foreign exchange trading scandal that almost brought down the bank. Since then, he has overseen a continual rise in operational profits and was at one time thought to be the natural successor to Mr. Stewart who had only planned to stay at the helm of NAB for two years following his own appointment to the CEO's job in early 2004.

In the final stages of an eighteen month-long recruitment process, the NAB board overlooked Mr. Fahour in a decision which raised significant doubts about the tenability of his position and long-term future with the group. Nevertheless, Mr. Fahour has always maintained a public display of loyalty to the bank and rebuffed any suggestion that he was preparing to leave.

The loss of Mr. Fahour's operating powerbase however, will most certainly see the possibility of his departure reemerge. Mr. Fahour's new role is undefined and the announcement that he will have a floating executive role that he will take up at NAB's group head office will certainly add fuel to the fire that he may leave sooner rather than later.

Mr. Fahour's former experience as an investment banker and his knowledge of some of the specialised and complex financial instruments that have been, in part, for responsible global credit crisis will make him an extremely useful foil to Mr Clyne whose background is in management consulting rather than banking.

Mr Clyne, who ran NAB's New Zealand banking operation for 18 months before being elevated to CEO, has decided to scrap the Australian divisional role and take it under his wing to ensure he has more direct control over the major profit driver of the group.

The simple objective, he said, was for him to be "closer to customers, employees and those leading our various Australian businesses as they represent a significant majority of group revenue and profit" Mr. Clyne said of the restructuring.

Mr Clyne said in a statement to the ASX that Mr Fahour would be working with him and other key senior managers on "operational, commercial and strategic challenges".

"Ahmed has done an outstanding job moving the Australian business into a market leading position," said the CEO-designate."I look forward to utilising his talents across the broader group." He said.