Once an open book, ANZ suspect and unaccountable

Ian Rogers
Finding time to produce amiable social media videos on 'books that shaped my life' - next week, Jez Alborough's 1999 classic Duck in the Truck - followers of ANZ and it's once reflective chief executive Shayne Elliot and his board are left perplexed by its silence in the face of a reputation crisis tied to harsh action by the Australian banking regulator.

Defiant and unapologetic, ANZ is the odd bank out among its big 4 peers as APRA sanctions the whole oligopoly. At 3 of these banks' depositors and shareholders can study up on why that is so since they may read the obligatory self-assessments submitted 9 months ago.

"The report was prepared for APRA on the understanding that the bank supplied it on a confidential basis and the bank never releases confidential submissions of this type," Stephen Ries, the ANZ's media adviser said yesterday.

 "We have no problem with APRA releasing it .. it's up to APRA to release it."

APRA, with no objection, seems to be leaving it up to ANZ to disclose, as NAB did in December and a reluctant Westpac finally did yesterday. It's the same policy for the other 32 banks required to report late last year on risk governance.

A lack of specifics in APRA's brief statement on their reasons for their intervention emphasise the need for the bank's customers to know the analysis and detail in the suppressed ANZ assessment.

APRA said it was "applying additional capital requirements to three major banks to reflect higher operational risk identified in their risk governance self-assessments.

"APRA has written to ANZ, NAB and Westpac advising of an increase in their minimum capital requirements of $500 million each. The capital add-ons will apply until the banks have completed their planned remediation to strengthen risk management, and closed gaps identified in their self-assessments."

Yet on the ANZ side there is so far not one word of context, rejoinder or insight in the face of the capital penalty from APRA.

In some ways ANZ ought to have a tidier story to tell on risk management and learning from the past. Remember the bank's lax funding of Opes Prime, which crashed in March 2008 and was the subject of a comprehensive internal study five months later?

Or is ANZ's thoroughness on risk management follow up on a par with that revealed in the CBA Prudential Inquiry?

Shayne Elliott's personal record as CFO from 2012 and CEO since 2016; some cynics wonder if that's tough material, ANZ exposed (like CBA and NAB) as underinvesting in risk, his conviction on budget priorities mostly to blame?

Over the years Elliott has showcased his own blend of emotional, strategic leadership.

"At ANZ ... we believe in an openness, transparency and sharing and how this culture is our true differentiator," he said as recently as February, and it's nothing new.

"I'm an avid reader and love immersing myself in a range of books that challenge my thinking. One book I feel is as relevant today as when it was published in 2002 is Execution - the Discipline of Getting Things Done, by Larry Bossidy and Ram Charan," Elliot shared with his LinkedIn followers a few days ago.

"Understanding how to link together the three core processes of a business - people, strategy and operations - is core to disciplined execution. This is a practical read about getting things done - my copy is dog-eared and full of margin scribbles," Elliot said.

What's not getting done is heading off any nonsense, ANZ sidestepping the chance yesterday to displace this with primary source material.

Into the void rushes innuendo and conjecture, with mischief makers free to speculate on ANZ's bad boy culture.

This converts old trading room scandals into a fizz whiz combining tipsy leaders and forever alert HR heads with less tenuous material such as multiple incidents of executive malfeasance, the mix capped off with jet-setting rumours alloyed into fact.

Salacious for sure, though chances are chunks of the above are true. And then there's a heated contest over the extent and quality of any data trails or video to underpin allegations of lurid or indulgent events.

Why not litigate? was the question at the heart of Ken Hayne's recent manifesto.

If money's been misappropriated or misused and standards of civility abused then prosecution or civil action may be on the agenda at ANZ.

The ANZ self-assessment won't be kept hidden all that long, one of the economics committees of parliament certain to haul it into the public domain.

The odds are that ANZ reconsiders, and stick a redacted version on their website soon.