National Australia Bank announced that Ross McEwan would commence as CEO and managing director on Monday, 2 December.
McEwan resigned as CEO of Royal Bank of Scotland (RBS) on 25 April and was announced on 19 July as the incoming NAB CEO. His exit from the UK bank follows RBS appointing Alison Rose as its incoming CEO. The appointment of an internal hire at RBS has allowed for a prompt start date at NAB for McEwan, which is positive given the time already elapsed since the resignations of previous CEO Andrew Thorburn and chairman Ken Henry were announced. We consider McEwan to be a high-quality appointment, with a skill set that is well-suited to facing a difficult Australian banking environment.
We continue to see NAB offering the greatest insulation among the major banks from the challenging retail banking environment, given its lower exposure to this segment, as well as the strong performance of its small-to-medium enterprise banking franchise.
In an expensive market, NAB offers reasonable valuation appeal, with the stock trading on a 13.5x FY20E price-to-earnings multiple. NAB remains our key preference among the major banks, and we maintain our Accumulate recommendation with a $29.60 target price.