UPDATE 1-ANZ’s New Zealand unit asked to tighten risk controls after expenses scandal

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(Adds background on ANZ’s former local unit CEO, quotes from statement)

Dec 12 (Reuters) – Australia and New Zealand Banking Group’s local unit needs to improve its internal risk controls, New Zealand’s central bank said, citing the findings of an external report ordered after the departure of its country manager this year.

The Reserve Bank of New Zealand (RBNZ) said on Thursday that ANZ needs to improve its director attestation process and asked for another external report by June 2021 into whether ANZ has implemented all recommendations of an existing report filed by Deloitte.

ANZ’s New Zealand unit came under fire this year when its then Chief Executive Officer David Hisco abruptly left the bank after a review of his expenses showed he logged payments for chauffeurs and wine storage as business expenses rather than personal.

In a statement, Reserve Bank Deputy Governor Geoff Bascand said it was worrying that Deloitte found a level of complacency in ANZ’s historical approach to the attestation process.

“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,” Bascand added.

A second RBNZ-requested report is set to complete in February next year, the central bank said.

One of the concerns that the RBNZ raised at the time when it ordered the report was the sale of a property by an ANZ unit to the Hisco’s wife. The Deloitte report came to the conclusion that the sale did not breach ANZ policies.

ANZ did not respond to a request for comment.

Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Muralikumar Anantharaman; Editing by Sam Holmes

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