Promoted or escaped?

Contrary to rumours that I enjoy disseminating, if only to see who is stupid enough to believe me, former ANZ Australia* CEO Brian Hartzer did not quit ANZ because they decided to ban access to Twitter (and all other social networking sites). Instead, he is taking up a post as part of the new Redeem Team for Royal Bank of Scotland - where former ANZ Top Teller John MacFarlane sits on the board.

He apparently has been earmarked as a potential heir for RBS head teller Stephen Hester. Stop me if you've heard this story before; after making a perennial outperformer of ANZ Retail, Hartzer was seen by some as the top internal candidate to replace John MacFarlane in 2007. That was until Mike Smith came across from HSBC Hong Kong and promptly filled the executive team with HSBC and Standard Chartered alumni.

So is Hartzer that much of a career masochist that he is willing to be touted "next in line" again, but this time at a bank on life support? What could possibly be so attractive about RBS, a bank so entangled in the financial crisis at multiple points (including UK mortgages and leveraged buyout loans), and likely to be tethered to the UK Government for the foreseeable future? Perhaps it is not the promotion; maybe it's more of an escape pod.

Consider this:
- Smith & Co have publicly stated that Asia is THE endgame for them (more eloquently, of course). That is what they were hired for, and the team's ANZ legacy will be measured solely by the success or failure of achieving "superregional bank" status.
- With a recession in place and unknown timing of recovery, the strong growth in ANZ Australia's retail banking and mortgages arms is likely to stall or decline. As it is, any stability in the retail banking market is heavily underpinned by Federal Government initiatives (deposit guarantees, first home buyer grants, stimulus cash grants). If not for these, retail banks would be competing with mattresses** for deposits.
- SMEs, the other main clientele of ANZ Australia, are likely to suffer the same fate.

If I were in Hartzer's old wingtips, I would be thinking "damn, the wine in this chalice is tasting rather bitter". No growth. Not the main focus of the CEO. And if ANZ's big swing at Asia via RBS's Asia assets*** fails (whether by a failed bid, or it turns out to be a disastrous acquisition), then taking over the wreckage is not an inspiring thought. And those are just the very obvious reasons.

Besides, why pass up a chance to stick it against the guy who got your gig, by having a say at who you end up selling the precious RBS Asia assets to. Twice. The other competing bidders are thought to be HSBC and StanChart.

So on further examination, maybe taking up a post as a civil servant to Her Majesty for now, and positioning oneself to take the reins at the upswing (if it ever returns), is a far better proposition than sticking around at one of the last handful of profitable, AA-rated banks in the world.

Sell high, buy low, right?

* That is, retail and small business banking.
** While crap investments during high inflation periods, mattresses offer fantastic risk-adjusted returns at other times, mainly by not being subject to mark-to-market and bankers' fees.
*** Officially, ANZ is only "considering assets in Asia", but everyone knows who's in the game.

Blurby thing: Rockett Fuel owns ANZ shares, and really should be listening to himself. However, Rockett Fuel is allergic to crystallising losses. By the way, none of this is advice. Invest at your own peril. Mattresses, meanwhile...