Reserve Bank demands improvements from ANZ

The Reserve Bank has demanded ANZ makes improvements to its internal processes after a spate of recent scandals.

Thursday, December 12th 2019, 3:28PM

The Reserve Bank says there are improvements required to ANZ New Zealand's director attestation processes, as the lender completed a review in the wake of its capital modelling failings, and controversial departure of former chief executive David Hisco.

ANZ engaged Deloitte to review its internal processes following the Reserve Bank's concerns about its capital modelling process, "inaccurate attestations about expenditure" by Hisco, and the sale of a St. Heliers property to Hisco's wife.

The review found "ANZ’s directors’ attestation and assurance framework requires improvement to become fully effective". The Reserve Bank said Deloitte has "recommended a number of actions that directors must ensure are taken to reach the level of maturity that is expected of ANZ".

Reserve Bank deputy governor Geoff Bascand said it was "concerning" Deloitte found "an element of complacency in ANZ’s historical approach to the attestation process".

The Deloitte report found the St Heliers property deal did not breach ANZ policies, but should have been disclosed in 2017 financial statements.

Bascand added: “The Reserve Bank and the New Zealand public expect all banks to ensure their director attestation and assurance frameworks are operating at the highest possible standard.

“ANZ’s directors must drive this change and ensure this benchmark is achieved. While we acknowledge ANZ’s work over the recent months to improve its framework and the attention these matters are now receiving, more is required. We will continue to work with ANZ on this until the Reserve Bank is satisfied that ANZ’s overall approach to attestation meets our expectations.”

The Reserve Bank has issued a further section 95 notice to ANZ New Zealand, requiring a further review by June 2021.

ANZ New Zealand chairman and former Prime Minister Sir John Key said: "While we should never have been in the situation where a section 95 review was necessary, the work has given the company the opportunity to reflect on its processes and systems around its attestation framework and improve the performance of the organisation.

”We’re committed to implementing all the recommendations by the next section 95 review in 2021,” Key added.

Tags: ANZ Reserve Bank