ANZ CEO Shayne Elliott has put his reputation on the line by failing to disclose the closure of two regional banks while giving evidence in a parliamentary inquiry. Dale Webster reports.
ANZ CHIEF EXECUTIVE Shayne Elliott made frequent mentions of “reputational risk” while giving evidence to the House Standing Committee investigating the big four banks in Canberra on Friday 30 August.
Mr Elliott also advised the panel that his bonus for the last financial year was now being assessed and “reputational risk” was one of the benchmarks, so that might explain why it was top of mind.
Given the timing, it is surprising that when asked about regional bank closures by committee chairman Daniel Mulino, he chose to withhold information about two branches in regional Australia that ANZ plans to close later this year.
Mr Elliott said:
Right now it’s not really an issue because as part of the agreement in terms of the Suncorp Bank acquisition we agreed that we will not close any regional branches for a period of at least three years so there is no process at the moment that’s on hold.
So as of whenever it was – a month ago – the condition was that, hey, there’ll be no closures of regional branches – either Suncorp branded or ANZ – for a period of three years.
Mr Mulino let the subject drop but circled back to the question in the dying moments of the hearing:
Daniel Mulino: When we talked earlier about rural and regional bank closures, can you just remind me what the current position is?
Shayne Elliott: Sure, we agreed with the Federal Treasurer that we will not close any regional branches, either Suncorp or ANZ, for a period of three years from the date of acquisition, which was a month ago.
Daniel Mulino: Okay, I’ve had some feedback that there is active discussion going on in Katoomba and Murwillumbah around this and there is actually petitions and discussions in the community and pushback on closures.
Mr Mulino was referring to decisions by ANZ to close regional branches at Katoomba on 23 October and Murwillumbah on 11 December.
The usually articulate Mr Elliott struggled to respond comprehensibly:
Oh. Yeah. Sure, sure... they were, sure, look... that’s a, they were ones that were already in train before the condition of, was even discussed with us, so [deep breath, pause] ...as you can imagine, in normal... outside of the current moratorium, there’s quite a long consultation period and we give communities a reasonable amount of notice and say this is what we are going to do, you know, and we talk to people about what alternatives will be put in place.
Some of those had already started. The negotiations and when the Federal Treasury put in place the requirements, they were literally, not at the last, they were right towards the end of our negotiations so when we kicked off those branch closure pr— [didn’t finish word] ...we weren’t aware we going to make that obligation...
He then stated that ANZ was “re-looking” at the decisions but ANZ’s Group Executive Australia Retail Maile Carnegie jumped in to dispel any suggestion that the Katoomba branch would be saved.
Carnegie said:
“So specifically with Katoomba we are planning to go through with that closure... and we have shared this with the Government.”
There were four regional ANZ branches listed for closure at the time the Suncorp deal was announced by Treasurer Jim Chalmers on 28 June and signed a few days later on 31 July: Katoomba, Bega, Portland and Murwillumbah.
ANZ has since backed down on Bega and Portland due to what is being reported by media as a response to customer and community feedback, but Ms Carnegie told Parliament on Friday that it was because they were “clearly in regional areas”.
Mr Elliott cited mould as an issue at Murwillumbah and indicated a new site might be considered but he gave no ground on Katoomba despite having received a petition six weeks ago with more than 10,000 signatures asking for the branch to remain open.
The situation as it stands is:
- ANZ made a deal with the Australian Government that in order to be allowed to purchase Suncorp Bank, it would not close any branches in regional Australia for a period of three years from July 31, 2024.
- There are no caveats attached to this condition meaning that close means close, not the act of announcing a closure.
- Katoomba is a regional town according to local council definitions and the Australian Prudential Regulation Authority (APRA)’s database banks used to draw the line between regional and metropolitan. (The Katoomba area is actually classified as both in APRA data, but ANZ clearly regards it as regional having published a branch closure impact statement only required for regional closures under the Banking Code of Practice.)
- ANZ has given no reason for pursuing the Katoomba closure when, according to evidence given under oath at a parliamentary hearing, other regional branches have been saved because they were “clearly regional”.
Mr Elliott already has form for breaking a commitment to government in relation to the Katoomba branch.
When the Senate Inquiry into regional bank closures was called in 2023, ANZ agreed that it would not announce any regional branch closures until its conclusion but more than a week before the final report was handed down, the bank jumped the gun and announced it would be closing its Katoomba and Bega branches.
Just over a week ago, ANZ announced it had changed its mind on the Bega and Portland branches but Katoomba and Murwillumbah remain in the gunsights.
ANZ has not responded to the Katoomba petition so organisers forwarded it to Dr Chalmers last week after learning of the Suncorp deal.
With Dr Chalmers being at pains to point out in the 28 June announcement that the conditions were legally enforceable, the raising of this issue during a parliamentary hearing is going to test the strength of his word.
Of concern, however, is Ms Carnegie’s statement that the Government has already been informed of ANZ’s decision to close the Katoomba branch.
Has Treasury told ANZ that legal action will ensue if ANZ breaks the Suncorp contract by continuing with this course of action?
After sticking his neck out for the bank to get the Suncorp deal through after it was initially rejected by the Australian Competition and Consumer Commission (ACCC), Dr Chalmers couldn’t appreciate the attention ANZ’s stance over these two branches is attracting, particularly if it continues to draw media attention.
As for Mr Elliott’s current preoccupation with reputation, his responses to Mr Mulino’s questions about regional branch closures before being busted for not disclosing that two regional towns will still lose banks in coming months is not a good look, particularly on the back of breaking his commitment to the Senate Inquiry.
He can’t escape the fact that he is now known for going back on his word and concealing information while under oath, giving evidence to a parliamentary inquiry.
Perhaps a deduction from his annual bonus could be used to run the Katoomba and Murwillumbah branches for the next three years.
Dale Webster is an inaugural recipient of a Walkley Foundation Grant for Freelance Journalism on Regional Australia. This article was originally published on The Regional and has been republished with permission. You can follow Dale on Twitter @TheRegional_au.
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