The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Antony Currie

MELBOURNE, July 23 (Reuters Breakingviews) - Macquarie's MQG.AX Shemara Wikramanayake is going out on top – but not across the board. The $70 billion financial powerhouse's first female CEO on Thursday said she will retire in November after eight years in charge. The stock is near a record high, rose some 120% during her tenure, with total shareholder returns of almost 200%. Yet she leaves her successor, retail banking boss Greg Ward, with some awkward loose ends at the Australian firm.

Overall, Wikramanayake has provided a steady hand during challenging times, including being willing to fix her own mistakes: she sold the Waddell and Reed asset management business she bought for $1.6 billion in 2020 to Nomura as part of a broader $1.8 billion deal last year. She also oversaw massive growth in Macquarie's commodities trading business.

But compliance failures have dogged the bank of late. While not big disasters by themselves, they racked up, prompting more than 25% of investors to vote against executive pay last year. More recently, staff at its investment bank have accused a handful of managers of bullying and other transgressions. The frequency of such problems puts its culture under the spotlight, suggesting complacency has crept in.

Most of these concerns arose as the bank suffered more than a year of ho-hum earnings, a departure from the mid-to-upper teens return on equity it used to churn out. The market volatility caused by the Iran war helped bolster the bottom line over the past nine months, but it does leave questions about where sustainable earnings growth will come from.

These wobbles have cost Macquarie a key industry crown. For most of Wikramanayake's tenure – and, for most of the firm's time as a public company – the bank traded at a multiple of book value markedly ahead of Goldman Sachs GS.N and Morgan Stanley MS.N. At 2.6 times that metric for the next 12 months, the Sydney-based firm remains steady, but its Wall Street rivals have surged past it and trade at closer to 3 times book. Assuming that's not due to the U.S. AI boom being a bubble set to burst, it suggests Macquarie is missing out on some earnings juice.

Her successor is well suited to tackle most of these concerns. He spent 14 years as CFO, including during the 2008 financial crisis, and has built the retail bank from virtually nothing to a top-five player in Australia. And why become CEO anyway if you're not up for a challenge?

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CONTEXT NEWS

Macquarie on July 23 said CEO Shemara Wikramanayake will retire. She will step down from the Australian bank on November 6 after presiding over the release of the company's earnings for the first half of its fiscal year. Wikramanayake has been CEO since late 2018.

Her replacement is Greg Ward, a 30-year veteran of the firm who since 2013 has run the banking and financial services division. He previously served as CFO for 14 years.