Did Hisco take the fall for ANZ board's embarrassment?
Once upon a time, at a large New Zealand bank, I watched my boss sign off our corporate credit card expenses.
As my eyes scanned down the list, a dodgy debit leapt off the page. We both arched an eyebrow. The culprit's attention was sought across the room. "Just drinks?" The response was yes. "With a client?" Affirmative again.
"Quite a lot of drinks," I muttered and went back to the incoming call. The dubious-looking charge was a discreet prostitution house, with a bar.
Another colleague got moved to Singapore. It's an expensive game, moving expats about with housing, airfares, storage and freight. Push the cha-ching button for the four bichon frises that went, too. It was either that or expensive kennels for several years.
In my own case, a Morris Minor was put on a train and shipped to the North Island at the expense of the bank's shareholders. I didn't think the old girl would make it if we drove.
Shareholder money gets spent in strange and seemingly inappropriate ways at times. Every ex-banker has a tale to tell from the 1980s or 90s, but that's largely where these stories remain. The expense clean-up was long ago and has been transparent for many years.
Soft commissions, aggressive sales targets and hidden fees are more the fashion these days – proper ingrained structural issues.
That's why this latest business with David Hisco, the chief executive at ANZ, has a funny whiff to it.
Is this really about the chief executive in the cellar with the chauffeur?
There has been ill health, some stored bottles of plonk and a corporate cabbie projected to the media as a chauffeur in a Bentley. It reeks of a hatchet job and a badly executed one at that.
Have ANZ conveniently let the outrage brigade take control? Was Hisco a sacrificial lamb? ANZ recently ended up the wazoo with the Reserve Bank regarding its capital models. You could even propose they "mischaracterised" their capital, but that might make the exec team squirm too much. This passes the general public by as a technicality, but it's huge from a regulatory perspective.
Was Hisco made to fall on his wine bottle so fresh hands could tidy up the problem and appease the central bank?
Every banker and their dog has ducked and dived a Royal Commission of Inquiry. We should have had one, full stop. The government let them off the hook, but now looks red-faced every time there's a scandal like the capital modelling.
We must constantly make sure consumers think there are no snakes in punga trees and our banking industry is trustworthier than the Aussies.
No need for that expensive inquiry.
A "parting" over "mischaracterised" expenses has politics all over it.
Surely they had a fixed contract with a corporate cab on-call for the head honcho. Yes, it was very wrong if his Saturday night restaurant ride was charged to the bank. But as a shareholder I'd expect him to be shuttled between home, meetings, social commitments and the airport as efficiently as possible. We all work and make calls in the back of a taxi. Oops, I mean chauffeur-driven car.
As for the booze storage, the man was an expat and would be allowed to ship his wine from Australia at shareholders cost. It's just household goods. Yet there are good reasons why large wine collections remain in situ, so storage costs are the alternative. ANZ's audit uncovered a remnant. There will be good reasons for the bank believing it was no longer an entitlement, such as the expiry of an expat package, or no written evidence of approval.
That led to Hisco losing $6 million in shares, his job and a public hanging from the ex-Prime Minister. Now back to that capital problem with the Reserve Bank. Will the regulator light a stick of dynamite and impose a massive corporate fine? Why bother. A head has been delivered.
Personally, I'd rather a chief executive's pay was docked for not reducing the number of customers in default KiwiSaver accounts, failing to reduce vertical integration, putting too much fat in foreign exchange transfers and fleecing small businesses with contactless and Visa fees.
For some, it seems salacious to see the career of a wealthy individual in tatters. The Hisco hatchet is simply smoke and mirrors. It prevents us seeing the true structural failures in our banking system.
I'd rather remember David Hisco for the minefields he led ANZ through.
My favourite being the repayment of client money in the Diversified Yield Fund and Regular Income Funds; complicated structures packaged by ING, which attracted $750m of savers' money. He walked in on the mess. ANZ took responsibility and repaid investors.
To say his ethics didn't match that of a newly minted teller was more than a little twisted on a big picture view.
Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views. They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.