Finance minister says ANZ 'has questions to answer' about CEO departure

Tuesday, 18 June 2019

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

The Reserve Bank is continuing to question ANZ about the abrupt departure of its long-time chief executive, Finance Minister Grant Robertson says.

Speaking to reporters in Parliament on Tuesday, Robertson said that the specific incident was largely one for shareholders and customers to judge for themselves.

'I'm sure there will be ANZ shareholders and staff members who are very disappointed in what they've seen here, but I don't think that necessarily means there's a systemic issue.'

Finance Minister Grant Robertson has said that ANZ New Zealand has questions to answer about the way it kept the Reserve Bank informed of the departure of its chief executive.

But Robertson also hinted at concerns on the part of the Reserve Bank, which regulates New Zealand incorporated banks, including ANZ New Zealand.

* Profits, strikes, settlements and huge paypackets: The ANZ career of David Hisco

* Sir John Key explains the expenses scandal that cost ANZ's Hisco $6.4 million

* ANZ chairman Sir John Key fronts media over chief executive Hisco's departure

* ANZ chief executive leaving following review of personal expenses

* ANZ chief executive on extended sick leave**

'The Reserve Bank is continuing to talk to ANZ here. There are some questions still to answer, particularly around the disclosure of when this occurred, and making sure that the ANZ did fulfil their requirements there. So I know that the Reserve Bank is still talking to them about that incident.'

ANZ announced on May 30 that Hisco was going on sick leave, a day before he was due to introduce Robertson at an annual post-Budget breakfast.

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On Monday ANZ announced that he was leaving, amid a dispute over the way expenses were recorded.

Chairman, former prime minister Sir John Key, said the review of Hisco's expenses originated in Australia. It had been underway for several months.

During the press conference Key was unclear about when the decision was made for Hisco to depart.

ANZ has not responded to requests for comment.

In a short statement, the Reserve Bank said it had been aware of the situation for around two weeks.

'The Reserve Bank has been kept closely informed by ANZ New Zealand chair Sir John Key, as these matters have emerged over the past two weeks,' the central bank said in a statement.

The Government is conducting a two-stage review of the way the Reserve Bank operates. The first led to changes around the decision making on interest rates.

The second stage, phase two, will assess whether the Reserve Bank had the tools it needed to properly regulate the banking sector.

Robertson said he had asked for case studies to illustrate whether the bank needed different tools.

'Certainly the way in which we give tools to the Reserve Bank to be able to work in the prudential regulation space is exactly the topic,' Robertson said.

'One of the things I've asked for as we go through phase two, is that we look at case studies so we can have an understanding of whether or not the Reserve Bank has the tools they need.

'Certainly I'll have those cases in mind when we do that review.'

'Extremely disappointed' with ANZ

Robertson also questioned Key's handling of questions about a separate issue which saw ANZ censured by the Reserve Bank in May, after it discovered it had been using an unapproved model as part of its calculation of how much operational risk capital it needed to hold.

The Reserve Bank statement criticised the board of ANZ, however Key said on Tuesday - the first time he has spoken publicly on the issue - that the board was entitled to accept what it was told and the mistake was made by 'a person quite junior in the organisation'.

Robertson said: 'I take very seriously the censure that was given to the ANZ for failing to keep to their capital models. That is about a relationship of trust between the Reserve Bank and a bank like ANZ and I am extremely disappointed that the ANZ did not meet the arrangement that they had.'

Asked about Key's comment that the mistake was made by someone junior in the organisation, Robertson said: 'That's simply not an acceptable response. It is the responsibility of the board and I'm sure Mr Key knows that.'