Australia & New Zealand Banking Group, a bank that is planning to double its investments in Asia, has hired Michael Smith, the head of HSBC in Asia, as its chief executive officer.

Mr Smith, 50, replaces John McFarlane, who ran Australia's third-biggest bank for a decade. The 29-year HSBC veteran is based in Hong Kong and was previously posted in Argentina, where he was shot in the leg during an ambush in 1999. A successor will be announced in due course, HSBC said.

"For HSBC, it's obviously a shame to lose someone who made the Asian business more vigorous and more competitive," Bill Stacey, an analyst at Credit Suisse Group in Hong Kong, told Bloomberg. "It's a good appointment for ANZ, perhaps signalling their ambition in Asia."

ANZ's first-half profit from Asia rose 23 per cent, outpacing earnings growth at home as the Melbourne-based bank focused more on the faster-growing economies of neighbouring countries. HSBC's Asia-Pacific network is the largest of any international bank and Smith's appointment may help speed ANZ Bank's expansion in the region.

"I've watched the Australian banks for a number of years and often wondered why they haven't done more in Asia," Mr Smith said in an interview. "When a market like Australia becomes mature, you have to look for opportunities elsewhere and I really do feel there is a significant opportunity in Asia."

Australia's gross domestic product expanded 3.8 per cent in the most recent quarter, compared with 11 per cent in China, 7.7 per cent in Vietnam and 5.97 per cent in Indonesia. ANZ has ventures in those three countries, as well as Malaysia and the Philippines.

"They have a focused strategy in the region and there may not have been an internal executive capable of filling that role," said Adrian Mulcahy, who helps manage $16 billion at Perennial Investment Partners in Melbourne, including ANZ shares.

ANZ has more investments in Asia than its Australian rivals, starting with a stake in an Indonesian bank in 1999. In May, it completed its purchase of 24.9 per cent of AMMB Holdings Bhd, Malaysia's fifth-biggest bank. McFarlane said in December ANZ may more than double its investments in Asia, where it has spent A$1.63 billion ($1.4 billion) on ventures since 1999.

HSBC, Europe's biggest bank by market value, has $441 billion of assets in the Asia-Pacific region, where it earned pre-tax profit of $8.9 billion last year, and has 60,000 employees in 20 countries and territories.

ANZ's profit from Australia rose 19 per cent in the first half, while New Zealand's gained 2 per cent. Smith worked in Australia for HSBC from 1985 to 1990 and two of his three children were born in Melbourne, he said.

In 1999 in Buenos Aires, where he was managing HSBC's Argentina business, Mr Smith's car was riddled by bullets in an ambush, although he managed to smash his blood-spattered car through his assailants' vehicles and outrun them in a subsequent chase, Time magazine reported last year.

"It was real James Bond stuff," Mr Smith said.

Two years later, he and 1,000 other HSBC employees were trapped in their offices as protestors tried to burn down the building during one of Argentina's economic crises, the magazine said.

He will be paid a salary of A$3 million a year for the first three years, with a short-term bonus of as much as A$3 million a year and a long-term incentive of as much as A$3 million a year in stock, ANZ said in a statement today. He will also be paid a "sign on" sum of A$9 million over three years to compensate for pay foregone at HSBC.

Shares of ANZ fell 0.3 per cent in Sydney. The stock gained 10 per cent in the past year, trailing an 18 per cent gain by the eight-member S&P/ASX 200 Banks Index.

ANZ Bank said in December that it was seeking to replace Mr McFarlane, a Scot. His retirement on September 30 will end the longest tenure among the heads of Australia's four biggest banks, during which Mr McFarlane, 59, bought New Zealand's largest bank.

Mr Smith, a British citizen, has been with HSBC since 1978 and led its Asia unit since August 2003. He worked for the bank in Hong Kong, the UK, Argentina, Malaysia, the Solomon Islands, the Middle East and Australia after graduating with honours with an economic sciences degree at City University in London.

Smith "has developed an impressive track record across multiple businesses and geographies with extensive experience in retail and corporate banking," Charles Goode, chairman of ANZ, said.

In China, ANZ Bank agreed in November to buy 19.9 per cent of Shanghai Rural Commercial Bank and also owns 20 per cent of Tianjin City Commercial Bank. Elsewhere in Asia, it owns 10 per cent of Vietnam's Sacombank, 29 per cent of PT Panin Bank in Indonesia and 40 per cent of a credit card venture with Metropolitan Bank & Trust Co in the Philippines. Last year, it started a bank in Cambodia through a venture with Royal Group.

Smith's key task "is to take ANZ to the next stage in which further expansion into Asia will have to compensate for slower medium-to-long-term growth in Australia and New Zealand," Johan Vanderlugt, an analyst at Daiwa Securities Group in Melbourne, said in a report after the announcement.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive