KEY POINTS:
Bank of New Zealand chief executive Peter Thodey says the stockmarket crash of 1987 taught him a few things about human nature.
Thodey, who has been with the company for 27 years, was involved in corporate banking when many businesses were going to the wall.
"It taught me an awful lot about people and how people behave under pressure. Some people stepped up and took it on the chin in terms of the fact that they tried their very best to repay us," he said. "Others ducked for cover and used every smokescreen they could lay their hands on to try to hide from their responsibilities."
Now Thodey, who has been CEO for seven years, is packing his bags to move to the BNZ's parent firm, the National Australia Bank (NAB).
There he will be group executive general manager, a new role dedicated to strategy and getting the best out of the bank's top staff.
When Thodey began at the BNZ, he had nine years under his belt as a regional manager for General Finance. He joined the BNZ's head office, where he worked in corporate and investment banking for 10 years, before moving to Auckland to build the business banking unit.
He is proud of the fact that after the "crash", the BNZ rebuilt its business banking operation to the point where it now has 26 per cent of the market.
He was appointed CEO after the bank was bought by the NAB in 1992.
"I was very proud of that. I spent my career in New Zealand for family reasons as much as anything else, but to be the first New Zealander to run the Bank of NZ under foreign ownership was a big thrill."
Thodey takes to his new job some hard-won battle experience from New Zealand's fiercely competitive market.
"If you count ANZ and National as two separate banks, you've got five major banking brands, plus Kiwibank, and then you've got a lot of niche players ... So you've got all these players competing for a market of four million people, and the pool of people is not getting bigger."
Under his leadership, the BNZ successfully battled low customer satisfaction ratings and tight margins. It ditched fees to mortgage brokers and channelled the money into lower interest rates, a strategy which appears to have paid off.
Banking analysis firm Roy Morgan said late last year that the BNZ had raised its satisfaction rates to 77.8 per cent and lifted customer numbers by 12 per cent to 544,000.
Thodey suspects competition in New Zealand banking will get tougher, resulting in a number of banks becoming niche players.
"You might get people targeting, for instance, credit cards or, as in the case of Rabobank, they've tended to target the agribusiness sector and slowly move out from them.
"That means full-service banks, the big five, are going to have to be very competitive across the board."
But further consolidation would depend on moves in Australia, he said. The "four pillars" policy there prevented the big players merging, although he thought this would happen in a few years.
A rumour that the BNZ itself could be bought up by Australia's St George Bank was unfounded, he said. "We've never had an intent or even tried to sell the Bank of New Zealand."
- NZPA
