Still the $75 million man

By Deborah Hill Cone

Friday 25th June 2004

The claim: the merged ANZ National Bank is so tightly controlled from Australia Sir John Anderson has had his lending authority cut from $70 million to "paper clip" levels.

Sir John's answer: "That's news to me. I can still sign off £25 million that's about $75 million right now for National Bank New Zealand, that hasn't changed."

For ANZ there is a different credit approval process.

"I can approve up to a huge amount of money so long as I also have sign-off from the risk area. It's a different process. Under ANZ, National got a whole new set of credit policies which will have different sign-off authorities depending on the credit rating of the customer, so nothing has changed there at all."

But with the legal amalgamation of the two banks, effective on June 26, will his £25 million lending authority end?

"Yes, that will, but what comes in is a whole new governance set of procedures, which the [New Zealand-based] board will approve, which delegate authority to the chief executive, who then in turn delegates or retains authority across a huge range of areas, credit risk being one of them."

An ANZ source said the lending authority was always a sign of power and the withdrawal of it was greatly resisted. "The level you can sign to is a sign of implicit trust or mistrust."

So how much control will the New Zealand part of the bank actually have?

A lot, Sir John insists, as policies must be approved by the board in New Zealand, which has three independent directors: chairman Roderick Deane, Norman Geary and Sir Dryden Spring. "The board are accountable here for the ANZ National Bank business."

All domestic systems will be run in New Zealand and managed in New Zealand, but the bank is still negotiating with the Reserve Bank of New Zealand over international systems.

"Positive meetings have been held we expect to resolve that in the near future," Sir John said, pointing out that many clients were operating in both jurisdictions.

"Take someone like Fonterra. ANZ New Zealand has been servicing Fonterra all the way round the world and will now be working hand in hand in Australia."

"When you've got a group as large now as we are 30% of the group in Australia we have very, very strong consulting and group oversight reporting. Information goes daily between Australia and New Zealand. You want to keep common policies, look for common systems, HR policies, and consult with what's going on in Australia."

It wouldn't be the way Sir John would put it, but one finance source insists: "Melbourne will interfere if they need to."

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