June 18, 2019 / 7:17 AM / 3 months ago

RBNZ says in talks with ANZ over departure of New Zealand CEO

WELLINGTON, June 18 (Reuters) - New Zealand’s central bank said on Tuesday that it is in talks with Australia and New Zealand Banking Group Ltd (ANZ) about the sudden departure of the chief executive of its local unit announced earlier this week.

David Hisco, who had been CEO of ANZ’s New Zealand unit since 2010, left the bank after a review of his expenses showed he logged payments for chauffeurs and wine storage as business expenses rather than personal.

The Reserve Bank of New Zealand (RBNZ) said ANZ New Zealand’s chairman John Key informed Governor Adrian Orr of Hisco’s departure about two weeks ago, on May 29.

“The Reserve Bank has been kept closely informed by ANZ New Zealand Chair Sir John Key, as these matters have emerged over the past two weeks,” a spokeswoman for RBNZ said in a statement to Reuters.

“Currently the matter is still being discussed with the ANZ and the Reserve Bank will generally not comment on ongoing matters,” she added.

ANZ is the largest among the top four Australian lenders that dominate the New Zealand market.

RBNZ undertook a conduct and culture review of banks in the country last year that found lenders needed to markedly improve how they identify and manage unethical behaviour.

The review was sparked by an inquiry in neighbouring Australia following a string of scandals involving rate rigging, money laundering and unethical conduct in wealth management and insurance.

While New Zealand’s regulator did not identify any widespread misconduct, the government has vowed to regulate conduct of the banking and insurance industries.

Speaking to reporters in parliament on Tuesday, Finance Minister Grant Robertson said while the ANZ issue was largely one for its shareholders and doesn’t reflect a systemic issue, RBNZ was seeking some answers.

“There are some questions still to answer, particularly around the disclosure of when this occurred, and making sure that the ANZ did fulfill their requirements there,” Robertson said, according to news website Stuff.co.nz.

ANZ did not respond to a Reuters request for a comment on Robertson’s remarks.

Hisco’s departure is an additional headache for ANZ’s New Zealand unit which a month earlier had its licence revoked to calculate its own operational risk capital due to “persistent” control failures.

Chairman Key said the expenses Hisco claimed for about nine years ran into tens of thousands of dollars. He said as the matter was more about the mischaracterisation of transactions than authority, Hisco would not be required to return the funds.

Hisco has so far not spoken publicly about his departure and has not responded to a request for comment sent to his LinkedIn page.

Reporting by Praveen Menon; Editing by Kim Coghill

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