Friday, January 12, 2007

National Bank Appoints New CEO

The Globe and Mail, Bertrand Marotte, 12 January 2007

In a surprise move, National Bank of Canada president and chief executive officer Réal Raymond is stepping down for personal reasons after only five years as head of the country's sixth-largest bank.

The 56-year-old veteran -- with a 37-year career at the bank -- is to retire on June 1 and will be replaced by Louis Vachon, who has been chief operating officer since July.

The announcement was made late yesterday, after the close of markets.

Mr. Vachon, 44, has a strong background in treasury and financial market activities at National.

He was at one point the right-hand man of Jean Turmel, the then-head of National's investment banking business; Mr. Turmel lost out to Mr. Raymond in the contest to replace National's long-time CEO, André Bérard, in 2002.

Mr. Vachon has held various senior management positions at National for 15 years.

Before being appointed COO, he was chairman and CEO of the bank's brokerage subsidiary, National Bank Financial Inc.

From 1986 to 1990, he worked at Lévesque Beaubien Geoffrion, the brokerage predecessor to National Bank Financial.

Mr. Raymond said on a hastily called media conference call last night that the time is right for him to leave and he is satisfied with what he has accomplished on his watch.

"The reason is personal. After 37 years of service at the bank, I feel I have achieved most of my professional and personal goals," he said.

"It's the right moment."

He said he is in fine health and enjoys an excellent relationship with senior management team and the board of directors.

He also said he is satisfied that he leaves a solid management team in place.

Mr. Raymond will also step down as a director of National Bank.

Mr. Vachon was vague about where he wants to take the Montreal-based bank when he takes over in June. "I'll take the next few months to sit down with the management team and do a review," he said on the call.

National chairman Jean Douville said the selection of a replacement for Mr. Raymond was hammered out over the Christmas holidays.

Under the guidance of Mr. Raymond, National has posted a robust financial performance.

Mr. Raymond also strengthened National's presence in Quebec, positioning it as a "super-regional" bank rather than trying to expand nationally and take on its bigger rivals.

Asked if he intends to continue the "super-regional" strategy, Mr. Vachon said it is a crucial "engine" for the bank and a key part of its mission.

He added that the focus will continue to be on consumer and small-business banking, wealth management and financial markets.

The high-level change at National came as a something of a shock, said one source in Montreal's finance community.

Mr. Raymond "seemed quite happy in his post. This seems to me very sudden."

National said in a press release that Mr. Raymond will serve as a special adviser to the bank on a part-time basis for one year after his departure.

Mr. Douville said in a statement that the change is in line with National's succession plan.

"In his various positions with the bank, Mr. Vachon has demonstrated both strategic vision and an ability to mobilize resources to attain his objectives," he said.

"We are highly confident that he will lead the bank to new heights."

National Bank made the announcement after markets closed. Its shares, which have risen 49.5 per cent in the past three years, fell 33 cents yesterday to $64.17 in Toronto trading.