WELLINGTON (OnNewsToday) – New Zealand financial authorities have written to the country’s biggest banks seeking assurances they are not engaged in the sort of misconduct exposed at their Australian parent banks by a powerful judicial inquiry.
The Royal Commission, as the Australian inquiry is called, has been a publicity disaster for Australia’s major lenders – all of which own New Zealand banks – turning out revelations of widespread corporate malfeasance since it began in February.
Among other revelations, Australia’s largest listed wealth manager, AMP Ltd, was found to have charged customers for advice it never provided, then deceived the corporate regulator. Australia’s biggest mortgage lender, Commonwealth Bank of Australia, charged fees to dead clients, the inquiry heard.
“To date we haven’t seen any evidence of systemic abuses along the lines of the Australian industry, but as we’ve said to the New Zealand banks, we can’t afford to be complacent,” Financial Markets Authority (FMA) Chief Executive Rob Everett told Radio New Zealand on Wednesday.
“We’ve asked them to provide assurances to us … that they have scrubbed their business models, and that they have a basis for being confident that these issues don’t exist here.”
A deadline was not set and the FMA expects it will be weeks before the banks reply, Radio New Zealand reported.
If they fail to cooperate “then they’ll see more of us in court”, Everett said.
The Reserve Bank of New Zealand (RBNZ) governor has also contacted the lenders, RBNZ spokesman Angus Barclay told OnNewsToday.
Australia and New Zealand Banking Group operates a New Zealand subsidiary, as does Westpac Banking Corp, while Commonwealth Bank owns New Zealand’s ASB Bank and the National Australia Bank owns Bank of New Zealand. None had an immediate reply to OnNewsToday’ requests for comment.
Australia’s Royal Commission was convened after years of financial-sector scandals including rate-rigging and alleged money-laundering.
“That just hasn’t happened here,” Westpac’s New Zealand Chief Executive Officer and New Zealand Banking Association chair David McLean told Radio New Zealand.
ANZ Bank, Westpac and ASB agreed during 2014 and 2015 to pay a total of NZ$24 million ($17 million) in compensation after admitting to engaging in misleading conduct over the sale of interest rate swaps to New Zealand farmers.
ANZ New Zealand Chief Executive David Hisco said there were “no systemic issues” and his bank welcomed the scrutiny.
“We’re not seeing or hearing the stuff that’s over there,” he said in an interview with Radio New Zealand.
Reporting by Charlotte Greenfield in Wellington and Tom Westbrook in Sydney; Editing by Stephen Coates