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MarketScreener Homepage  >  Equities  >  AUSTRALIAN SECURITIES EXCHANGE LIMITED  >  Australia and New Zealand Banking Group    ANZ   AU000000ANZ3

AUSTRALIA AND NEW ZEALAND BANKING GROUP

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Australia's ANZ fired senior executives due to bad banking behavior: CEO

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10/11/2018 | 11:56pm EDT
FILE PHOTO: A pedestrian is reflected in the window of a branch of the Australia and New Zealand Banking Group (ANZ) in central Sydney

SYDNEY (Reuters) - Australia and New Zealand Banking Group fired over 200 staff for wrongdoing, including senior executives, due in part to issues raised at a public inquiry into financial sector misconduct, ANZ Chief Executive Shayne Elliott said on Friday.

In his first public comments addressing criticism leveled at the bank in the inquiry's interim report, Elliott said the country's third-biggest lender would take a tougher approach to punishing bad conduct.

"We should dismiss people when they are grossly negligent or when they do things that are clearly bad and cause customer harm," Elliott told parliament's House Economics Committee. "My commitment is to make sure that I do hold people to account."

In the past year, about 10 senior ANZ executives had been dismissed for issues related to misconduct, Elliott said.

The comments reflect the pressure Australia's highly profitable major banks are under to improve governance since the quasi-judicial inquiry, or Royal Commission, exposed widespread misconduct across the financial sector.

In almost 60 public hearings, the inquiry has revealed systemic problems in incentive arrangements used to reward staff for selling products to people who did not need them or could not afford them.

According to the report published last month, all four major Australian banks also charged customers for services-not-rendered and some took fees out of dead client accounts.

The year-long Royal Commission has received more than 9,000 submissions by aggrieved customers and has scrutinized a handful of specific cases that have stunned the country.

ANZ's Elliott said he took personal responsibility for the failures that have occurred since he took the reins of the bank in 2016 and that he was appalled by the report's findings.

"It was pretty saddening to read the report. It made me feel embarrassed for the industry," said Elliott, who also chairs the lobby group, the Australian Bankers' Association.

"Seeing the impact that we've had on individual customers ... was embarrassing and shocking."

APOLOGY

Elliott ordered a review of how ANZ had treated a number of clients mentioned in the interim report by Kenneth Hayne, the former-judge leading the Royal Commission.

"We have broken the trust of many of our customers for which we unreservedly apologize and there's no excuse for that."

ANZ said on Monday it would take a A$711 million ($506.59 million) hit to profit partly due to higher costs for compensating customers stung by poor banking practices. The bank's full-year results are due Oct. 31.

Other banks and wealth managers are also setting aside cash to restructure their businesses, defend lawsuits and compensate customers, while bracing for tougher laws and tighter margins.

The heads of Commonwealth Bank of Australia and Westpac Banking Corp said at a parliamentary hearing on Thursday that they were wrong to oppose the Royal Commission, in contrast to the industry's defiant tone before the inquiry began in February.

National Australia Bank CEO Andrew Thorburn will face questions from politicians on Oct. 19.

(Reporting by Paulina Duran in SYDNEY; Editing by Stephen Coates and Himani Sarkar)

By Paulina Duran

Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIA AND NEW ZEALAND BANKING GROUP 0.26% 26.52 End-of-day quote.8.14%
COMMONWEALTH BANK OF AUSTRALIA 0.42% 71.43 End-of-day quote.-1.74%
NATIONAL AUSTRALIA BANK LTD. 0.52% 25.09 End-of-day quote.3.70%
WESTPAC BANKING CORP 0.68% 26.51 End-of-day quote.5.15%
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Financials (AUD)
Sales 2019 19 268 M
EBIT 2019 10 186 M
Net income 2019 6 812 M
Debt 2019 -
Yield 2019 6,11%
P/E ratio 2019 11,28
P/E ratio 2020 11,01
Capi. / Sales 2019 3,91x
Capi. / Sales 2020 3,82x
Capitalization 75 276 M
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Mean consensus HOLD
Number of Analysts 14
Average target price 27,9  AUD
Spread / Average Target 5,5%
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Managers
NameTitle
Shayne Cary Elliott Chief Executive Officer & Executive Director
David M. Gonski Chairman
Michelle Jablko Chief Financial Officer
Gerard Florian Group Executive-Technology
Paula Jane Dwyer Independent Non-Executive Director