Since Kelly left to join Westpac in August, Fegan has held the position of acting chief executive of the financial services company.
Under the terms of his contract, Fegan's annual remuneration package will be $1.7 million, which includes superannuation contributions and fringe benefits tax.
He is also eligible for an annual performance incentive of, in aggregate, up to $1.8 million.
Fegan's promotion comes just weeks after St George released its annual results. The bank announced a record profit of $1.16 billion for the year ended September 30, 2007, a jump of 11 per cent for the 12 months.
The bank's wealth businesses - Asgard Wealth Solutions, Advance Asset Management, margin lending, financial planning and insurance - experienced double-digit growth. Revenue across the division grew by 15 per cent.
"Looking ahead, the group has a clear organic growth strategy in place, which has consistently delivered," Fegan said.
"My focus will be to ensure that we drive this strategy while continuing to reinvest in the business. Given the increased competitiveness and volatility in the marketplace, we do not have the luxury of being complacent."
Prior to joining St George in 2002, Fegan held the role of chief operating officer and director of Yorkshire Bank in the United Kingdom and United States.
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