ANZ chief joins calls for rethink on bank mergers

SYDNEY, Nov 27 (Reuters) - The new chief executive of Australia and New Zealand Banking Group Ltd (ANZ.AX: Quote, Profile, Research, Stock Buzz), the nation's third-biggest lender, added his voice on Tuesday to calls for changes to rules blocking the country's four biggest banks from merging.

Michael Smith, who took charge at ANZ on Oct. 1, said Australia's election of a new Labor government provided an opportunity to overhaul the so-called "four pillars" policy in order to help Australian banks compete overseas, particularly with fast-growing Asian economies.

"Australia's national interest requires us to allow the banks to ultimately grow to a size where they can compete as 'super regionals'," Smith told a business lunch.

"Unless we become more outward looking now, the next wave of competition from Asian banks with best-in-class customer solutions will be formidable competitors," he said.

The "four pillars" policy prevents a merger between National Australia Bank Ltd (NAB.AX: Quote, Profile, Research, Stock Buzz), Commonwealth Bank of Australia Ltd (CBA.AX: Quote, Profile, Research, Stock Buzz), ANZ and Westpac Banking Corp (WBC.AX: Quote, Profile, Research, Stock Buzz), which account for about 70 percent of total banking assets.

Other leading Australian bankers have previously urged a rethink of the 10-year-old policy, which was designed to ensure competition, saying it has outlived its purpose.

Smith, formerly with HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), noted the growing overseas focus of Chinese banks, such as Industrial and Commercial Bank of China (601398.SS: Quote, Profile, Research, Stock Buzz), which last month agreed to pay $5.6 billion for 20 percent of South Africa's Standard Bank (SBKJ.J: Quote, Profile, Research, Stock Buzz). ($1=A$1.15) (Reporting by Ben Wilson)