ANZ blows up ‘legally binding’ Suncorp deal over Katoomba branch
By Dale Webster
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.
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 commitee chairman Daniel Mulino he chose to withhold information about two branches in regional Australia that ANZ plans to close later this year.
“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,” Mr Elliott said.
“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.
ABOVE: ANZ chief executive Shayne Elliott after telling Economics Committee chairman Daniel Mulino for the second time that ANZ had agreed to not close any regional branches for three years as part of the Suncorp deal that was signed on July 31. Image: APH
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: “Ok, 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 October 23 and Murwillumbah on December 11.
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.
“So specifically with Katoomba we are planning to go through with that closure … and we have shared this with the government,” she said.
ABOVE: ANZ chief executive Shayne Elliott attempts to explain his way out of the planned Katoomba and Murwillumbah closures under questioning from Daniel Mulino. Vision: APH
There were four regional ANZ branches listed for closure at the time the Suncorp deal was announced by the Treasurer Jim Chalmers on June 28 and signed a few days later on July 31: 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’s database banks use to draw the line between regional and metropolitan. (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 gun sights.
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 June 28 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, 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 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.
This article was originally published on The Regional
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4 comments
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Harry Lime
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Clakka
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Jon Chesterson
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Jake
Return to home pageAs usual , the banking Grand Poobahs tell lies,and are almost always full of shit.Why wouldn’t they be?After the Banking Royal Commission, where they expressed regret, and fuck all repercussions…the government made a lot of stern admonishments..for public consumption,and they then resumed business as usual..which is to keep screwing their customers.Too big to fail, etc, etc. Why has the public got a jaundiced view of politics in this country?Because it is not run by the people they elect,it is run by these pricks and all the other large vested interests that keep up the squirrel grip on the duopoly,despite their denials. Despite their apprentice mistakes ,the Greens have been right about their policies for years.And it worries the shit out of these people as the chickens get closer to the roost,even as they,the crooks, feign contempt.
It’s really hard to ascertain whether the Oz main retail banks are more evil than the jusrisdiction jumping profiteering multinationals. It can be very difficult to catch-out the multinationals, but not so the Oz main retail banks, who on numerous occasions have been revealed to be shysters, liars and fraudsters, who breach numerous laws including the Corporations Acts, all to the benefit of crooks, and detriment of ordinary customers.
None of the individuals have been prosecuted, usually receiving only little hand-slaps. And as for ‘reputational damage’, they really don’t give a rat’s, as they scurry back into their ivory towers. In fact within their cabal, they likely receive more ‘reputational damage’ for NOT profiteering, or fraudulently ducking and weaving to maximize profits by guile, graft and teetering on the razor’s edge of lawlessness.
It’s beyond time govts hit ’em hard. The depleted ASIC and ACCC need to be given resources and the right teeth by which to properly investigate and prosecute. The sins only persist because of the Bank’s political pressure and deviousness, and the Govt’s lack of enforcement.
I am thoroughly disgusted with ANZ.
When we first took out our home mortgage ANZ made us pay $10,000 extra embedded in the loan to cover ‘THEIR’ alleged insurance risk (not our building’s insurance premium we pay ourselves every year), which ANZ said was mandatory as a condition of the loan on a 10% deposit, despite this being less than half of what ANZ said we were eligible to borrow, but we chose a more modest priced property. They also charged us $385 pa admin fees for the offset account. They ceased this practice a couple of years ago and now charge us $10 pm admin fee despite me being retired over 65 yrs, and despite being eligible for free banking on a non-interest transaction bearing account. Over the past 10 years we discovered we were paying up to 2.5% above ordinary interest rates, which they were giving to new customers. We have had to go into the local regional branch in Katoomba 3-4 times over the past 5 years to negotiate a drop to the same level as new and other borrowers. We had to assertively claim it face to face, there was no process or notification to advise we were eligible and how this would have otherwise been handled without a local regional branch eg no on-line provision and no transparency or disclosure on the hiked up interest rates we were paying at the time. Each year the margin between our rate and new borrowers crept back up without disclosure or our knowledge, but it was clear to us while doing our research there was a hidden upwards bracket creep manipulated by the bank when interest rates change. Each year we have had to go back to recover that ground. On our bank statements, ANZ claim we now have a 2.4% discount rate, yet we currently pay 6.19%, same or more than many new borrowers today and from many other banks including the big four. So where is this 2.4% discount they post on our statements?
ANZ Springwood Branch in the Mid-Mountains was closed a few years ago and ANZ intend to close Katoomba later this year. Our nearest ANZ branch will be more than 50 kilometres away in Penrith, that is a 100 km round trip from Katoomba where we do our regular weekly-fortnightly shopping.
Two years ago, CGU insurance (associated with ANZ at the time and originally taken out on ANZ advice as a mandatory requirement) increased our building’s insurance premium by 40%, and 30% consecutively the previous year, so it almost doubled over a 12 month period from preceding year. I formally complained about the unreasonable hike, CGU made excuses regarding risk despite ignoring that we had roof sprinklers, independent water and power to mediate the only significant major risk of bushfire here in the Blue mountains, other than storm damage which was far less a threat. We also have two RFS stations within 1 and 2 kms either side of our home. CGU refused to consider this as a mediating factor, claiming the rise in cost of other risks, particularly flood and buildings replacements, which clearly were of little or no consequence in our area, flood particularly is simply bizarre at our elevation! As a result of this complaint, we discontinued our CGU insurance associated with ANZ and acquired cover by a more reasonable and competitive insurance company, but CGU continued to take the annual premium out of our ANZ bank account without our authority and consent, having repeatedly advised CGU of the policy cancellation well in advance and notifying ANZ of the new cover taken out, in due diligence. I made numerous calls and in writing the CGU but I was unable to cancel the premium. I eventually had to go into the Katoomba branch of ANZ and ask them to cancel the automatic direct debit payments, which they said they couldn’t do, advising it had to be deleted at source by CGU authorisation. I told them CGU refused to communicate with me or cancel the premium payments despite our cancellation of the policy. It took us an hour and a joint phone call in person from the ANZ Branch itself in Katoomba to CGU to get the premium authorities cancelled.
Without access to the local regional branch in Katoomba we would have been denied resolution on all of these financial traps and arguably ‘illegal’ organisational charges and practices, as there was no pathway to troubleshoot this either online or by phone, believe me I had tried. Later this year there will be no ANZ branches in the entire Blue Mountains District-region, and I do not consider Penrith in Western Sydney as local or regional by any definition, the closest remaining branch at a 100 km round trip. I cannot even find an ANZ ATM other than in Katoomba on the premises of the branch they are closing. To draw cash, other ATMs, mostly privately owned charge fees to withdraw cash. So where to from here?
Those who can afford to can pay out their mortgage, not many would have such a choice without access to Super and long term savings or they can go elsewhere. So we will pay out the loan one way or another and take our personal banking needs elsewhere. If Katoomba closes, we will cease to bank at all with ANZ. I will not operate a bank account ( transactional, savings, investments or loan accounts) with a major national bank that cannot offer me a local regional branch, fair and transparent banking services, access to cash, capacity to troubleshoot face to face, and especially one that has been clearly dishonest and rips off its customers. Last November ANZ posted a record annual cash profit of $7.4bn following a 14% increase on annual profit at a time, and on the back of customers who have encountered serious financial hardship with the rise in both corporate driven inflation and interest rates (not public demand or wages driven).
Banks in Australia, including the Reserve Bank of Australia, continue a sector wide oligopoly, charging record interest rates, fees and charges, hidden fees and charges, debit and credit card transaction fees while artificially controlling interest rates, terms and conditions of banking and accounts, fees and charges, loans – savings rates and margins, ATM fees and availability, while closing critical regional branches and services infrastructure, claiming all the time this is due to consumer (public) demand – threatening to move us to a cashless society where all our financial transactions and daily living will be controlled, automated and governed entirely by the banking sector with unnecessary hidden costs and fees. And all this means exclusive digital and on-line controls of our banking needs utterly exposed to fraud and scams that the banks refuse to protect us from, indemnify, remunerate or compensate us from loss or harm. They even claim it is no longer their responsibility to secure the transportation and security of cash, which has always been their responsibility. Now they wish to remove this basic function from our society alongside the branches themselves and allow private operators to charge the general public for ATMs, the ‘privilege’ of using cash, which has always been a public necessity for trading, goods and services in any economy.
So when Katoomba ANZ Branch closes, we will discharge the mortgage from their grasp, close our ANZ bank accounts and go elsewhere with a bank that can provide basic banking services, fair practices and choice, and one not entirely dependent on digital on-line technology and all its traps, scams and burdens. We will not ever save, borrow or transact again from ANZ or any other bank that behaves this way.
No branch in the Blue Mountains, no fair banking in the Mountains, no access to reasonable, secure, competitive banking services, arrangements and choices in our region, then we will find a bank who will or another way to conduct our financial transactions and savings needs and affairs.
As for the government contactual agreement holding off regional bank closures as a condition of the ANZ’s acquisition of Suncorp, this has been the least of my worries, but I will lobby for the government to take legal action and charge ANZ for breach of contract, and I will punish any Federal or State Government at the next election that fails to do so.
ANZ posts record $7.4bn profit despite surge in mortgage holders falling behind, 13 November 2023, The Guardian Australia https://www.theguardian.com/australia-news/2023/nov/13/anz-posts-record-74bn-profit-despite-surge-in-mortgage-holders-falling-behind
ANZ just sucks, I left them and now like NAB, will have to be with them again.