By Gareth Vaughan
Bryan Inch, the ex-CEO of CBS Canterbury set to become head of retail at the Combined Building Society created through CBS's merger with Marac Finance and the Southern Cross Building Society, says he is quitting because he didn't fancy setting up a national banking branch network for a second time.
Inch told interest.co.nz that just before Christmas he started questioning whether he really wanted to assume the head of retail role at the new entity, due to list on the sharemarket at the end of the month and which plans to apply for a Reserve Bank banking licence - which could be a lengthy process - in about July.
The Combined Building Society, or proposed 'Heartland Bank', announced Inch's surprising departure via a stock exchange release on Tuesday. However, Inch said there was "nothing too sinister" about his decision.
"About a week before Christmas I started thinking. To some degree the retail side of it I did that with Rabobank," Inch, who was managing director of Rabobank New Zealand from 1998 to 2003 where he oversaw the integration of Rabobank with Wrightson Finance, said. "Building up the branch network takes a huge commitment. It’s a big job establishing a nationwide branch network."
"I very much lead from the front and like to get into all branches and build rapport with all staff and it’s hard work. Having done that once already for Rabo, I got the (merger) vote over and then it suddenly hit me. 'Is that really what I want to do again?' Once that vote went through it was like a big sigh of relief."
After the final stakeholder group voted in favour of the 'Heartland Bank' merger on December 10, the deal secured court approval on December 16 and was completed on January 7. The Combined Building Society, the combined entity's current operating name, is due to list on the sharemarket on January 31. It has obtained a BBB- investment grade credit rating from Standard & Poor's and has been accepted into the extended Crown retail deposit guarantee scheme, which runs until December 31 this year, by the Treasury.
Greenslade and Inch 'operate a bit differently'
Former CBS Canterbury shareholders hold 13.04% of the new entity, ex-Southern Cross Building Society shareholders 14.75% and Pyne Gould Corporation subsidiary Marac holds 72.21%.
Inch, who had expressed an interest in the job of managing director of the Combined Building Society which went to Marac and PGC boss Jeff Greenslade, said he and Greenslade operate a bit differently and having another CEO in the management team can complicate things. His departure would therefore give Greenslade more freedom to manage how he wants to, Inch said.
"I’m not saying it wouldn’t work. I’m not saying he’s right and I’m wrong or vice versa. We just have different styles. I’m more than comfortable that Jeff will give it his best shot and it will get the success that we all believe it can do," Inch said.
He and Greenslade had had a good chat this week and Inch said he had offered his continued support if anyone in the management team wanted "to pick my brains or thoughts on any part of the business."
As for missing out on the top job, Inch said it wasn't a surprise given CBS was a minor player in the merger.
"If CBS had 70% of the shareholding I probably would’ve been the CEO but we didn’t, so I’ve got no qualms about that. The dominance of the board, the dominance of the business, rests with the Marac part of the entity and Jeff’s more than capable of leading that business."
'Disappointment' that CBS couldn't make it alone
A Cantabrian who was enticed home from roles as Rabobank's deputy global head of international direct banking and Australia and New Zealand head of financial services in Sydney to become CBS CEO in September 2008, Inch said when he took the CBS role it was "clearly" to look for consolidation and growth opportunities.
"We believed we had the skills and the team to achieve that growth ourselves. (But) the time I took the job was months before the Global Financial Crisis really hit and that just stalled it really. (With) events since then, the earthquake and whatever else, it was becoming increasingly hard," said Inch.
"A lot of us are disappointed that CBS couldn’t make it by itself, but at the end of the day we’re realists as well and that (the merger) was the best option for adding value to shareholders."
He suggested the Combined Building Society had a "very good" chance of securing a banking licence.
"It’s certainly hugely better than it was for any one of us individually. It has got scale, momentum, the skills to step up. I sincerely hope it does (get a licence)."
The proposed 'Heartland Bank' wants to double its NZ$2.2 billion asset base within five years through growing lending to families, small businesses and the rural sector.
As for his own plans Inch said he had nothing lined up yet. After a "bit of merger fatigue over Christmas" he was ready for a break. He had spent a couple of days refreshing his CV this week but wanted to take two or three months off. He was hopeful of finding a new job in New Zealand, preferably in the Canterbury region, and after 25 years working in the banking sector, he was open to doing something new.
"If I had a preference at the moment it’s probably not (a job) in the banking industry," said Inch.
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