Startled Smith pointed ANZ at NAB deposits

ANZ's rarely discussed plan to merge with NAB in mid 2008 provided one talking point in yesterday's Banking Day exit interview with outgoing CEO Mike Smith.

Quizzed on the rationale for this blocked merger, Smith deflected to a spray on the accident, as it were, of Australia's four pillars banking policy.

"My feeling at the time was basically the synergies we'd have got from amalgamating the two Melbourne banks would have been considerable.

"I think we were a little bit alone in calling what was going on [with the crisis]. To me, anything that was going to improve the deposit base was a good idea."

Thus balance sheet thinking informed the ANZ rationale, a concession to the concerned thinking alive in the industry as the months ticked by across the financial crisis, then several months from superstardom.

Smith missed a chance to sell the merger in retrospect, or open the question of the weakness of one of the parties to the deal - in this case, surely not ANZ.

"The GFC was of course a frightening time," he said.