Commonwealth Bank's incoming chief executive Matt Comyn has vowed to "accelerate" the bank's attempts to address its cultural problems, as the lender tries to restore its tarnished reputation after a series of scandals.
CBA on Monday opted for an insider to lead the financial giant, appointing retail banking boss Mr Comyn as the replacement for chief executive Ian Narev.
While many in the financial markets had expected CBA would recruit an outsider to replace Mr Narev, chair Catherine Livingstone said Mr Comyn had the right mix of experience needed to restore the bank's reputation, and maintain its strong financial performance.
Bank investors and analysts said Mr Comyn was a capable executive, but some said the CBA board had taken the low-risk option in the appointment, rather than shaking up the lender by bringing in an executive from outside the bank.
Mr Comyn is being promoted to lead CBA as the bank faces a series of major regulatory and legal challenges, including a powerful prudential inquiry, a legal battle over its compliance with money laundering laws, and a royal commission into the sector.
Ms Livingstone said there were still key parts of CBA's culture that needed improvement, namely how it dealt with risks in its regulatory compliance, and operating procedures across the bank.
Ms Livingstone said Mr Comyn had "taken a lead" in these areas over the last six months, during which CBA has been responding to explosive allegations that it breached Australia's anti-money laundering laws on a mass scale.
"The advantage of an internal candidate, over and above all of the other attributes that Matt has, is that we have no loss of momentum in those programs to address those cultural areas where we feel that we need to improve," Ms Livingstone said.
Mr Comyn said that as well as responding to the Austrac allegations, a key priority for him would be to respond to any recommendations from a powerful inquiry into the bank's governance, being led by former banking regulator John Laker. A progress report from Mr Laker is expected this week.
"In terms of the elements of culture which do need to be improved...they are the processes around operational risk management and compliance risk management," Mr Comyn said. "Of course I will look to accelerate that."
Mr Comyn, who is 42, has been running the largest division in the bank since 2012, and was previously the head of CBA's online stockbroking arm, CommSec.
Velocity Trade analyst Brett Le Mesurier said the choice of an internal candidate suggested there would not be a major upheaval by the CBA as it tries to deal with the regulatory and compliance problems.
"All of the challenges facing them are going to come from outside the business. It is a sign they don't think there's a whole lot wrong," he said.
Managing partner of Arnhem Investment Management, Mark Nathan, said while Mr Comyn was a "very capable" executive and the "lowest risk" choice, he would have supported an external appointment.
"My preference would have been for an external candidate simply because I think the bank does need a fresh set of eyes looking at it," said Mr Nathan, who manages a fund worth about $2 billion.
Mr Comyn will be paid $2.2 million in fixed remuneration, and will have the opportunity to make a further $2.2 million in short-term incentives, and up to $3.96 million as a long-term bonus. This is less than Mr Narev's remuneration, which included fixed pay of $2.6 million, with total pay hitting $12.3 million in 2016.
Ms Livingstone said the lower level of pay was "more consistent with trends and community expectations".
"The board is very conscious of community expectations in relation to remuneration, and so yes we have set the fixed remuneration at a level below Ian's, but we think that's appropriate," she said.
The royal commission into the sector is also tipped to scrutinise CBA closely, and on Monday banks handed in their first submissions to the inquiry, listing cases of misconduct that had occurred over the last decade.
Each of the submissions, which were not made public, listed instances of misconduct within the banks over the last 10 years. ANZ chief executive Shayne Elliott said that many of the misconduct covered in its submission was known, but seeing it listed in one document was "confronting".
The story CBA's Matt Comyn to push ahead with cultural change first appeared on The Sydney Morning Herald.