ANZ chief executive leaving following review of personal expenses

Monday, 17 June 2019

ANZ CEO David Hisco has gone from the bank after spending thousands of dollars on corporate cars and wine storage.

The chief executive of ANZ, David Hisco, is leaving the company amid an internal review of personal expenses, the bank announced.

Hisco, 55, stepped down several weeks ago, a move the board said at the time was due to health reasons.

On Monday it announced he was leaving the bank.

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As part of the departure he has been required to forfeit his rights to share options which had not vested. ANZ said the shares were worth $6.4 million.

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ANZ New Zealand chief executive David Hisco took a leave of absence recently which the bank said at the time was due to health issues. On Monday, ANZ New Zealand confirmed Hisco would not return, amid 'concern about thecharacterisation of certain transactions following an internal review of personal expenses'.

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At a press conference, ANZ chairman Sir John Key said the concern was linked to the use of chauffeur-driven cars and wine storage.

His replacement, Antonia Watson said: 'It is a day of shock and disappointed. [David Hisco] was well liked as a leader'. However 'David has not met the standards and expectations'.

The money would not have to be paid back. Key said Hisco had an explanation for the spending, but the issue was around how the money was reported on Key's books.

The amount of questions was in the 'tens of thousands', Key said.

Earlier, in a statement, ANZ said Hisco's departure 'follows ongoing health issues as well as board concern about the characterisation of certain transactions following an internal review of personal expenses,' ANZ said.

'While Mr Hisco does not accept all of the concerns raised by the board, he accepts accountability given his leadership position and agrees the characterisation of the expenses falls short of the standards required.'

ANZ New Zealand chairman, former prime minister Sir John Key, said the move was necessary.

'We are disappointed David is leaving ANZ under such circumstances after such a long career, however his departure is the right one in these circumstances given the expectations we have of all our people, no matter how senior or junior.'

Hisco became chief executive of ANZ New Zealand in 2010.

According to the ANZ website, Hisco had worked at ANZ for more than 30 years, including heading the bank's global commercial segment from 2008 to 2014. He had been managing director of ANZ-owned finance company UDC from 1998 to 2000, later becoming chairman of the unit.

David Hisco Bio as 4april2019 by Hamish on Scribd

The bank's annual report shows he earned total remuneration of $3.12 million in 2018, down from $3.4m a year earlier.

During his time at the top of the bank, by far New Zealand's largest lender, profits rose strongly, hitting almost $2b in the year to June 30, 2018.

Hisco is replaced by Antonia Watson, who had been acting chief executive for several weeks.

'We are fortunate to have an experienced executive in Antonia Watson to step in while we conduct a search for a replacement. Antonia's extensive banking career has her well placed to help ANZ manage through this transition,' Key said.

ANZ said Hisco 'will receive his contracted and statutory entitlements to notice and untaken leave, with all unvested equity to forfeit'.

Censure, resignation calls

ANZ has been under fire over the past month, with a severe reprimand by the Reserve Bank and calls for Key and Hisco to leave or be forced out.

On May 17 the Reserve Bank censured ANZ New Zealand, stripping it of its right to calculate how much risk capital it requires to hold due to 'a persistent failure in its controls and attestation process'.

The Reserve Bank generally allows the large Australian-owned banks to calculate how much capital they need on the basis of the type of lending they have done.

However, a review by ANZ found that one of the risk models, to calculate operational risk, had been decommissioned in 2014 without its knowledge.

The move, announced on the final day for submissions on the Reserve Bank's controversial plan to require banks to hold more capital, required ANZ to hold an additional $277m in capital.

ANZ has made little comment about the issue, beyond saying the bank and its board were 'disappointed'.

At the start of June, Stuff revealed that former BNZ chairman Kerry McDonald had written to Reserve Bank governor Adrian Orr, arguing that Key, Hisco and others should resign 'or be removed' as a result of the issue.

'In my view … this failure indicates that the board was/is not competent and also raises serious questions about the bank's management and reinforces my concern with the competence of the boards of the banks generally,' McDonald wrote.

'It indicates a lack of knowledge, capability and responsibility in relation to the bank's risk parameters, which must be at the core of any banks competence.'

McDonald, who has also been a director on National Australia Bank and was chairman of Opus International until 2017, said resignations were required.

'In my opinion, reflecting the false attestations alone, the chairman and chief executive of the bank should resign or be removed from role, as well as heads of risk, legal and compliance and at least two other directors should be 'retired' as part of a board 'refresh' to improve the overall competence of the board,' he said.

Key said on Monday what while if Hisco was at the press conference he would have taken some responsibility for the issue but it was a very separate issue.

Key added that the issue was created by a 'junior staffer'. It would have been inappropriate for him to resign as the board had been told in writing that the model was compliant.