Commonwealth Bank of Australia has promoted its former private banking head to the role of chief executive of the bank, on a basic salary of A$2.5 million ($2.7 million), according to a filing. 

Ian Narev will take over as CEO of Australia's largest bank effective 1 December, following the retirement of current CEO, Sir Ralph Norris. 

New Zealand-born Narev has been with the bank since 2007 and has served as group executive for business and private banking since January 2009, including the Commsecc business. Prior to that, he was the group head of strategy, and lead the A$2.1 billion acquisition of Bankwest from HBOS in 2008 and investment into Aussie Home Loans. He also served as global partner and co-head of New Zealand-based McKinsey & Co's Asia strategy. 

He will receive a total fixed salary of A$2.5m initially, plus incentives, said CBA in a filing with the Australian Stock Exchange. This will be reviewed annually.

The formal transition process will start in October, when Narev will become CEO-designate, chairman David Turner announced at a press conference.

Commonwealth shares rose 1.6 per cent on the news yesterday, to close at A$50.52.

Commonwealth had A$1.7 billion in unaudited cash earnings in the quarter to 31 March 2011, up 13 per cent from the previous year. The bank is expected to release its full-year earnings report in 10 August.