Enquiry not needed in NZ: ANZ boss

The big four banks and AMP have been called before Australia's Royal Commission for Misconduct in the Banking, Superannuation and Financial Services Industry.

Last week, it was revealed that ANZ did not act on a rogue financial planner who was using his clients' money to invest in property without authorisation.

Revelations from the inquiry led to the resignation of AMP's chief executive and board chairman.

But Hisco told Good Returns that the bank on this side of the Tasman faced a “different set of circumstances” to its parent company in Australia.

ANZ New Zealand has a separate board and a separate governance structure with regulators including the FMA, Commerce Commmission and Reserve Bank.

“They’re in our business actively,” Hisco said. “They can look at whatever they want to look at.

He said one of the big differences was the New Zealand market did not have big superannuation schemes with lots of advisers chasing business.

“We don’t have advisers floating around the market place trying to get that."

Hisco said2% of ANZ’s New Zealand staff were advisers. Most of them worked in the private bank operations dealing with sophisticated investors.

He refers to the ombudsman schemes in New Zealand and says there is little evidence there is a problem in New Zealand like Australia. The Banking Ombudsman has said complaints received about banks are roughly distributed according to market share - ANZ is the biggest bank in the New Zealnad market.

“There’s noting in there that looks like anything like the sort of stuff that has happened in Australia," Hisco said.

ANZ Australia says its dealings with the Australian banking royal commission will cost it about A$50 million ($53.3m) this year.

The bank has reported it spent A$16m on legal and other costs associated with the Royal Commission in the first half of the year and flagged a $50m hit for the full year.

Comments from our readers

On 2 May 2018 at 7:13 am retired blogger said:

Isn't this the same bank that made $1 billion profit in 2010 ?

whilst ten of thousands of Kiwis were reeling from the 2009 GFC

and just yesterday ANZ announced profits of nearly $2 billion in NZ (annualised)

ANZ were behind the disastrous ING funds and their behaviour was nothing to admire

The Commerce Commission had to drag them kicking and screaming into a paltry 60% settlement

Mr Hisco, you can prove ANZ in NZ is honourable

Just back the call for a Royal Commission in NZ

On 2 May 2018 at 7:30 am Denis said:

No no no ... The correct answer is "We would be more than happy to participate fully in any such inquiry."

These people - honestly.

On 2 May 2018 at 7:55 am Murray Weatherston said:

I wonder how Mr Hisco would comment to the story running in another publication about an investor with $540,000 to invest who allegedly got advice from ANZ that said they should put most of it into ANZ products. The proposal was accompanied by a statement that there were no COIs to disclose. If the story is as it seems to be, pure sales dressed up as advice. QED.

On 2 May 2018 at 8:29 am Brent Sheather said:

Predictable nonsense from Mr Hisco. Toward the end of the story ANZ wrings its hands and says the “Royal Commission will cost A$50m”. I would have thought the more relevant number was how much money ANZ has extracted from customers committing the crimes that the Royal Commission is investigating.

On 2 May 2018 at 8:40 am thombentley said:

If Mr Hisco and ANZ NZ have nothing to fear from an inquiry, why does he want to prevent one?

Let's unpack Mr Hisco's comments a bit.

1. "We don't have advisers floating around trying to get superannuation business". Maybe not, but every member of your customer facing staff (which is a lot more than 2% of the workforce) have targets to sell Kiwisaver, and your business bankers are tasked with signing ANZ Kiwisaver 'preferred provider' agreements with all their business clients.

2. "Only 2% of our NZ staff are advisers". Which is roughly 180 advisers. If they're mainly in the Private Bank then they're mainly AFAs, in which case they make up close to 10% of all active AFAs in NZ. However, the Private Bank doesn't like to deal with sub-$1m portfolios, so these are probably assigned to RFAs using the cookie cutter approach Murray refers to above. Can ANZ comment on whether the RFAs are incentivised to use in-house products over 'best in class' external products?

3. "Complaints to the Ombudsman are low" - because most clients don't understand the serious potential conflicts of interest, and they don't understand they're being sold to, not 'advised'.

What's clear from the Australian experience is people have gone to the banks and large institutions because they trust them, and this trust has been abused for years to generate more profits.

In Australia there has essentially been a massive transfer of wealth from the clients to the large institutions. Let's at least look at whether the same thing is happening here.

On 2 May 2018 at 8:59 am Steven Popodopolus said:

The best reason to conduct an enquiry is when the company potential being investigated says there is no need.

The conduct coming out of the commission is chilling and unfortunately the road NZ seems to be destined to go down with the current proposed legislation.

On 2 May 2018 at 1:01 pm Eyeinthesky said:

And just yesterday as an update to Retired Blogger's comment: "The bank's net profit after tax for the six months to March 31 rose $95 million, or 11%, to a fresh record half-year high of $964 million. In the equivalent period of the previous year the bank's net profit after tax was $869 million"

Mr Hisco states that an enquiry was not necessary here. Would any of the bank CEO's in Australia have said one was required?

We now have The RBNZ and FMA saying an inquiry is not necessary here. The regulator in Australia didn't call for an investigation.

Quoting for Australian Media: "The banking royal commission was established in late December, after years of public pressure from whistleblowers, consumer groups, the Greens, Labor, and some Nationals MPs"

New Zealand has the most profitable banks in the world.

When is this farce going to be cleared up here as well?

Enquiry not needed in NZ: ANZ boss

ANZ New Zealand chief executive David Hisco sees no need for a Royal Commission in New Zealand.

Wednesday, May 2nd 2018, 6:00AM 7 Comments

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