Finance Finance News ‘We’ve lost touch with customers’, ANZ boss admits

‘We’ve lost touch with customers’, ANZ boss admits

ANZ chief executive Shayne Elliott described the result as a "good performance". Photo: AAP
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Banks have forgotten their role in the community and created a culture that treats customers poorly, according to the CEO of one of Australia’s big four.

ANZ chief executive Shayne Elliott admitted on Wednesday, in the second of this week’s parliamentary hearings, that profits from ANZ credit cards were “well above” the bank’s overall return on equity of about 12 per cent, even though the return from cards had been declining.

Credit card interest and fees deliver more profits to ANZ than almost any other arm of the bank’s business, a fact that made it impossible for Mr Elliott to deny his institution had “lost touch” with its customers.

He apologised for his bank’s failures, but added he was proud of the ANZ’s culture in fixing problems once they became apparent.

“As an industry we have lost touch with our customers and we have become too internally focussed and forgotten our role in society and the community at large,” Mr Elliott told the economics committee.

“And when we’ve lost sight of that, that’s taken us down a path that’s created bad behaviours and poor culture and really not treated customers with the respect they deserve.”

When asked if he had “an appetite” to reduce credit card costs, Mr Elliott indicated he did.

“I think there is an opportunity for us, frankly, to take a bit of leadership on this and do something better around, not just the interest rate, but also the fee structure on cards.”

Scott Buchholz, a Liberal MP, rejoiced at the banker’s response and declared it “a good day for Australia”.

Later in the hearing, Mr Elliott conceded that clients were not advised that financial regulator ASIC had banned some of his financial planners.

But he defended the ANZ over ASIC’s claim the bank had engaged in unconscionable conduct and manipulating the bank bill swap rate between 2010 and 2012.

Mr Elliott said only two employees had been fired for violating the ANZ’s code of conduct, while all others had been reinstated.

“Because we’ve done our own internal investigations and believe they’ve done nothing wrong.”

Among other things, the CEO admitted the ANZ overcharged 400,000 customers fees that should not have been imposed and had subsequently repaid $2.9 million.

But he had no idea if any disciplinary action was taken over the fleecing of customers in that particular way.

It's "no surprise" Shayne Elliott and Ian Narev leapt at the idea, a consumer lawyer says. Photo: AAP
Shayne Elliott and CBA boss Ian Narev were the first of the big bank bosses to front the committee. Photo: AAP

Under questioning from the Greens’ Adam Bandt, Mr Elliott said the ANZ was currently discussing whether to continue donating to political parties.

NAB announced on Wednesday it would cease all political donations, effective immediately. It had previously donated generously to both major parties.

If all banks follow suit, it will cost the Liberal Party alone about $1m a year in funding – another problem Prime Minister Malcolm Turnbull will have to explain to his increasingly frustrated backbench.

Mr Elliott also jumped at the suggestion of a banking tribunal, where customers could lodge complaints against the sector.

Labor has lambasted the idea of a tribunal, saying it is a way for the banks to avoid a full-blown royal commission into their profiteering.

Opposition Leader Bill Shorten said the government was spoon-feeding the banks and that they had agreed with the government before the hearings to embrace the concept of a tribunal.

Mr Turnbull was having none of it, insisting a royal commission is not warranted and that committee hearings were sufficient.

NAB chief executive Andrew Thorburn and Westpac chief executive Brian Hartzer will appear before the economics committee on Thursday.

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