[The Wrap] What's going on at ANZ?
The biggest news story of the week has to ANZ chief executive David Hisco falling on his sword. (Some may describe the sword actions differently, but that's something for readers to decide).
Saturday, June 22nd 2019, 8:15AM
There's been plenty of commentary in the media about Hisco's abrupt departure. Was he pushed? Did ANZ chairman Sir John Key throw him under the bus? Who knows? But it does seems a little odd.
I'm lucky enough to have interviewed Hisco many times and found him to be one of the most frank CEOs (especially of Australian owned banks) ever; some comments nearly flawed me. He was direct, pugnacious and confident.
His track record running ANZ is full of many achievements including profit metrics and bringing together ANZ and the National Bank successfully.
For financial planners Hisco also oversaw repayment of client money in the Diversified Yield Fund and Regular Income Funds. These funds, which had around $750 million of investors' money were a disaster. Hisco inherited this mess, and ANZ took responsibility and repaid investors. I'm on record around what happened and am one of the people who reckon the bank did a good job (finally) in tidying up this mess. Much better than other companies at this time.
Some people are using this issue as a trigger for an Australian-style Royal Commission. The main two people calling for a commission are former BNZ chairman Kerry MacDonald and Simplicity's Sam Stubbs. I have no idea what drives McDonald, but Stubbs should be careful about calling the pot black. After all he ran Hanover Finance for a while and investors there came off second best compared to those in ANZ-DYF and RIF funds.
From the facts we know Hisco didn't perpetuate some massive injustice on customers like what has happened across the Tasman. Rather the issues are around his expenses. It was very personal.
In some ways it is not a surprise. In terms of dealing with the big banks - and here it's the big four and not the smaller NZ-owned banks - there is a culture arrogance and "we know best". They are also incredibly bureaucratic, and hierarchical organisations. Hisco occasionally talked about how ANZ was like a big oil tanker and hard to turn around quickly.
The Australian Royal Commission may be trying to make that turn around happen quicker and ANZ's New Zealand board has decided to stamp out any issues as soon as there is a whiff of a problem.
It seems interesting the Reserve Bank has known about this issue several weeks, but not done anything. That suggests the regulator sees this as an internal issue as opposed to a wider failing in the banking sector. Until we hear from them we won't know the answer.
To wrap up here is an interesting thought.
One of the things I often asked Hisco is whether ANZ would consider trail commission for mortgage advisers, like Westpac, BNZ, Sovereign and SBS. In a recent interview he said only if they wheeled him out in a box.
Well, maybe that is what happened this week.
Maybe with a new CEO we will see a different approach to the past nine years?
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