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Former ANZ boss David Hisco's personal use of chauffeur driven cars over nine years may have cost him his job.
ANZ NZ chairman Sir John Key said Hisco believed he had an agreement with the previous group chief executive of the Australian bank over the use of chauffeur driven cars.
Key told the Herald a lack of transparency over the expenses resulted in them being mischaracterised in ANZ's books.
"We have got to be consistent with the standards we set from the freshly minted teller to the CEO."
"He believed that he had authority for this. He had an explanation for why it was recorded in the way it was. I don't believe it meets the standard that David would set under normal circumstances."
The issue came to light following a review that ANZ Group CEO Shayne Elliott undertook of some members of his executive committee.
Key said the issue does not involve how much money was spent but rather how that spend was characterised in the records.
Key said the board was first notified of anomalies around three months ago and decided to take action after an internal review.
He said the bank would not be pursuing Hisco to pay back the money for anomalies that stretch back over a nine-year period.
However, Hisco would be forfeiting around $6 million in equity he held at the bank.
The issue was then passed to the ANZ NZ board - that Key chairs - to make a call.
Hisco's departure follows ongoing health issues as well as board concern about the characterisation of certain transactions following an internal review of personal expenses.
Key didn't think there were any systemic problems in senior leadership in the bank.
Hisco does not accept all of the concerns raised by the Board, he accepts accountability given his leadership position and agrees the characterisation of the expenses falls short of the standards required.
ANZ today confirmed the appointment of Antonia Watson as acting CEO of ANZ New Zealand, following the departure of Hisco.
Key said: "We are disappointed David is leaving ANZ under such circumstances after such a long career, however, his departure is the right one in these circumstances given the expectations we have of all our people, no matter how senior or junior.
"We are fortunate to have an experienced executive in Antonia Watson to step in while we conduct a search for a replacement. Antonia's extensive banking career has her well-placed to help ANZ manage through this transition," Key said.
Hisco had been CEO of ANZ New Zealand since 2010 when he took over from Jenny Fagg.
In the year to September, he earned $3.76 million while the bank made just short of $2 billion in net profit.
ANZ suffered a couple of regulatory blows last month with the Reserve Bank forcing it to hold more capital against housing and farm lending from June 30 and to use the standardised model for calculating its operational risk capital rather than its own internal model.
That's because it had been using a modified internal model for calculating ORC since December 2014 without first getting RBNZ approval.
The ORC measure was one of about 45 internal models ANZ uses and it can continue to use the other 44.
Only the four major banks, which are all owned by Australia's major four banks, are allowed to use their own internal models to calculate capital.
In February, RBNZ revealed that ANZ needed only slightly more than half the capital that the government-owned Kiwibank needs to back each $100 of mortgage lending because of the advantage it gains from using internal models.
Kiwibank, along with all the New Zealand-owned banks, is required to use standardised models.
- With BusinessDesk