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Improvements to ANZ director attestation processes required


Reserve Bank requires improvements to ANZ New Zealand’s director attestation processes
12 December 2019


The first of two Section 95 reports requested from ANZ New Zealand (ANZ) has been completed with the findings showing that further improvements are required to ANZ’s director attestation processes.

In June 2019 the Reserve Bank requested a report on ANZ’s Director Attestation and Assurance framework, under section 95 (s95) of the Reserve Bank of New Zealand Act 1989. ANZ engaged Deloitte, with the approval of the Reserve Bank as per s95, to prepare the report and the Reserve Bank has required ANZ to publish a summary of the findings.

The Reserve Bank requested the report following concerns about:
• ANZ’s directors attesting to compliance despite ANZ’s failure to use an approved Operational Risk capital model as required by the Reserve Bank, since 2014;
• inaccurate attestations about expenditure by the former chief executive; and
• the sale of a St Heliers property to the former chief executive’s wife.
These concerns were included as case studies in the report.

The report found that ANZ’s directors’ attestation and assurance framework requires improvement to become fully effective. Deloitte has recommended a number of actions that directors must ensure are taken to reach the level of maturity that is expected of ANZ.

Reserve Bank Deputy Governor Geoff Bascand said it was concerning that Deloitte had found there was an element of complacency in ANZ’s historical approach to the attestation process and that its operation was piecemeal.

“The Reserve Bank and the New Zealand public expect all banks’ to ensure their director attestation and assurance frameworks are operating at the highest possible standard.

“ANZ’s directors must drive this change and ensure this benchmark is achieved. While we acknowledge ANZ’s work over the recent months to improve its framework and the attention these matters are now receiving, more is required. We will continue to work with ANZ on this until the Reserve Bank is satisfied that ANZ’s overall approach to attestation meets our expectations.”

To ensure that ANZ meets all of Deloitte’s recommendations, the Reserve Bank has issued a further section 95 notice. The additional notice will require an external party to confirm by June 2021 that ANZ has implemented all of the recommendations.

The Deloitte report concludes that the sale of the St Heliers house by an ANZ subsidiary to the wife of the former chief executive did not breach ANZ policies or highlight system weaknesses in the attestation framework. The FMA has also looked into the sale of the house and found that ANZ should have disclosed this as a related party transaction in its 2017 financial statements.

The second section 95 report requested on ANZ’s compliance with the Reserve Bank’s capital requirements is due for completion in February 2020.

More information:
Summary of Finding - Deloitte report on Review of ANZ Bank New Zealand Limited – Effectiveness of the director attestation and assurance framework (PDF 338KB)


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