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Bank of Queensland tells top banana to split

The Board of Bank of Queensland (ASX:BOQ) is looking for a new CEO after removing incumbent George Frazis from the position with immediate effect.

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The bank told the ASX on Monday in a surprise announcement that it had started a “domestic and international executive search for a new Managing Director and Chief Executive Officer and that its current Chief Executive Officer, George Frazis, is leaving the Bank.”

He leaves with a $1 million payment.

No explanation was given for the immediate departure, but the statement gave a big hint that it was over strategy.

Mr Frazis had been admonished by the chairman Patrick Allaway in April in an apparent blow-up. Mr Frazis said at the time he had the backing of the chairman. That is no longer the case.

BoQ shares fell more than 5% yesterday to $7.14.

“George Frazis joined BOQ in September 2019 and has overseen a return to growth in all key channels across the Bank, the successful acquisition and integration of ME Bank, as well as achieving strong progress in the Bank’s technology transformation,” Mr Allaway said in Monday’s statement.

“However, the Board has formed a view that different leadership is now required to ensure BOQ can continue to build a stronger and more resilient bank through future cycles. We thank George for his significant contribution to BOQ over the past three years.”

Mr Allaway will become the bank’s temporary executive chair until a new CEO is found and current non-executive director Karen Penrose will be the lead independent Director during this period.

“The appointment of Mr Allaway as Executive Chairman is designed to retain stability and will ensure that the executive leadership team can stay focused on their current roles and responsibilities,” the bank said in the statement.

Mr Allaway said that while continued growth remained embedded in BOQ’s strategy, the Bank’s key areas of focus would be:

  • “Strengthening the Bank – BOQ’s asset quality, capital and liquidity buffers remain sound. Heading into a more challenging economic cycle, the Bank will prioritise further strengthening our financial and operational resilience. In doing so we will continue to work with regulators in advancing maturity in risk behaviours and architecture to strengthen its management framework and practices, including BOQ’s control environment in respect of non-financial risk;
  • “Technology Transformation – Continuing to build a cloud-based digital and data- led scalable bank, improving the Bank’s customer and employee experience and moving off multiple complex legacy systems to reduce its reliance on manual processes;
  • “Optimising Performance – A sharpened focus on simplification, productivity, disciplined execution and optimising returns; and
  • “Embedding our purpose and values in everything we do, making a difference for all our stakeholders.”

That sounds as much like the Gospel according to Chairman Allaway for any prospective CEO as it does a strategic direction.

Does that mean anyone who thinks differently need not apply?

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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