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Australia's ANZ to refund 3.4 million accounts that 'need fixing'

Australia's ANZ to refund 3.4 million accounts that 'need fixing'

FILE PHOTO: An ANZ bank logo is pictured in Sydney, Australia April 23, 2018. REUTERS/Edgar Su/File Photo GLOBAL BUSINESS WEEK AHEAD

SYDNEY: Australia and New Zealand Banking Group said on Tuesday (Dec 17) it planned to refund owners of 3.4 million customer accounts for past wrongs but ruled out the need to raise new cash, as its board survived an investor vote over executive pay.

The update from Australia's fourth-largest lender at its annual meeting shows how an excoriating public inquiry into financial-sector misconduct continues to gnaw at the country's biggest money managers 10 months on.

ANZ, larger rivals Commonwealth Bank of Australia, Westpac Banking Corp and National Australia Bank, and wealth manager AMP Ltd have set aside billions of dollars to refund customers after the public inquiry revealed systemic charging of fees for no service.

"We are paying customers back as fast as we can," ANZ Chief Executive Officer Shayne Elliott told shareholders, without updating the A$1.1 billion (US$746.5 million) ANZ has previously said it expects to pay back to wronged customers.

"No one is proud of the fact we need to remediate mistakes of the past but we are learning from our failures and strengthening the bank as a result."

Elliott said the bank had identified 3.4 million retail and commercial accounts that "need fixing" and had so far paid back owners of more than one million of those accounts, at an average of A$60 per account. It did not say how many individual customers could expect a refund.

The meeting was relatively calm compared to the AGM the previous week of No 2 lender Westpac, which is reeling from allegations it facilitated 23 million payments which breached money laundering laws.

While Westpac shareholders voted down the company's executive pay plans for a second year running, ANZ had its executive pay voted up comfortably. Two such consecutive "strikes" could trigger a shareholder vote to remove the board.

Westpac, ANZ and NAB all had their executive pay voted down in 2018 amid the daily drumbeat of negative headlines arising from the powerful Royal Commission inquiry. NAB has its annual meeting on Wednesday.


ANZ Chairman David Gonski told the meeting the company could meet rising capital requirements, particularly in New Zealand where it is the biggest bank, without the need to sell new stock.

"We are confident we can meet the higher requirements without having to raise new capital from shareholders given the work already completed to comply with higher capital requirements," he said.

ANZ faces pressure at its New Zealand unit as the central bank there has pointed out the need to improve internal risk controls, citing an external report conducted by Deloitte.

In June, the head of ANZ's New Zealand unit, David Hisco, left over a dispute about personal expenses.

ANZ shares were flat on Tuesday, in line with the broader market. 

Source: Reuters/ad


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