ANZ NZ employees' trust in senior leadership tested after Hisco scandal

Wednesday, 7 August 2019

ANZ purchased a $7.5m home for former CEO David Hisco, which it then sold to his wife for a loss.

Employee morale is at a low ebb at ANZ NZ following the departure of the bank’s CEO, David Hisco, and the disclosure by Stuff of the lavish benefits he enjoyed during his tenure.

Through a recent staff survey, ANZ found that “overall trust” in senior leadership at the bank has fallen to 49 per cent. And only 60 per cent of bank employees said they feel able to raise issues and concerns within ANZ “without fear of negative consequences”.

That measure fell from 86 per cent before Hisco’s departure.

Staff satisfaction also dropped to 69 per cent from 83 per cent, while 71 per cent of employees said they would recommend the bank as a place to work to friends and family, down from 87 per cent previously.

* Did fear of reprisal stop ANZ acting on whistleblower tip?

David Hisco's 'non monetary benefits,' averaged $441,116 a year, for a total of $3.35 million across his eight full financial years in ANZ New Zealand's top job.

* How did ANZ lose money on a house in the hottest housing market in memory?**

ANZ distributed the results of the “My Voice” survey to staff by email last week; a source within the bank shared them with Stuff, but requested anonymity fearing reprisal. ANZ has warned staff against speaking to the press.

ANZ spokesman Stefan Herrick said the company held the survey following Hisco’s departure in order to “find out the mood of people after the leadership change”. He called the results “disappointing but not surprising considering what’s happened”.

In the internal email to all ANZ NZ staff, acting CEO Antonia Watson also called the results disappointing, and asked employees to be open with their concerns.

A company owned by ANZ NZ purchased this $7.5m St Heliers home for former chief executive David Hisco. It then sold the house to his wife at a huge loss.

In June, the bank announced Hisco’s departure; chairman Sir John Key said Hisco had misrepresented tens of thousands of dollars’ worth of personal bills as business expenses, including wine cellaring and chauffeur-driven cars.

Do you know more? Email rebecca.stevenson@stuff.co.nz

In making the announcement with acting CEO Antonia Watson at his side (Hisco was already off work on medical leave), Key said Hisco’s actions fell short of the standard of integrity required by the bank.

Sir John Key, pictured with acting ANZ chief executive Antonia Watson. Key didn't mention that Hisco's business expense account, reported by the bank as 'non monetary benefits' topped A$464,577 in 2018.

But subsequent revelations by Stuff quickly revealed that Key and Watson had given only a very partial accounting of the benefits Hisco enjoyed as ANZ NZ’s top banker.

For example, in 2017, the bank sold Hisco’s wife, Deborah Walsh, the six bedroom Auckland mansion Hisco had previously rented from ANZ and expensed as a benefit of employment.

The sale price was close to $4 million less than the home’s rateable value, and it was not disclosed to shareholders and regulators as a related party transaction.

ANZ NZ former chief executive David Hisco, wife Deb Walsh and Grand Designs host Kevin McCloud.

ANZ had also spent more than $500,000 renovating the home in 2015 and 2016, and it footed more than $100,000 annually in maintenance costs.

Acting CEO Antonia Watson has refused to answer questions about the sale, though she knew the details. In 2017, she was a director of Arawata Assets, ANZ’s wholly owned real estate holding company which sold 269 St. Heliers Bay Road to Walsh.

The source who leaked the survey results said employees see ANZ executives as hypocritical. “They knew what was going on with Hisco even as they were enforcing integrity for everyone else,” the source said.

The staffer said that both Felicity Evans, former general manager of human resources and Watson, then head of retail and business banking, were enthusiastic enforcers of ANZ’s “culture of integrity,” and took a strict line with middle managers on such breaches as company credit card use for personal spending.

Evans left the bank in 2018; she was a director of Arawata in 2017 when the St Heliers house was sold.

Annis O’Brien was also a director of Arawata in 2017 and remains on the bank’s executive team.

Antonia Watson is understood to be in the running for the permanent CEO position. ANZ said it expects to announce Hisco’s replacement in late September or October.

Australian-based ANZ has the largest share of the lending market in New Zealand. Following recent events, the New Zealand regulator, the Reserve Bank, requested it commission two independent reviews of its operations.

ANZ has confirmed that one of those reviews will consider how the bank conducted the sale of 269 St Heliers Bay Rd. It has not undertaken to make the results public or to share them with staff.

The second review will consider separate issues surrounding ANZ’s “persistent failure” to properly calculate how much capital it is required to keep on hand to mitigate against risks taken in its lending.