Posted By


Hisco, first NZ scalp of Banking Royal Commission

Nikki Mandow

Wellington, June 20, 2019

Antonia Watson and former Prime Minister John Key announcing the departure of David Hisco at ANZ’s Auckland office. (Photo: Nikki Mandow)

The Australian Royal Commission into misconduct in the banking sector was always going to have ramifications in New Zealand.

But the fact the first scalp in this country is the hard-working, well-liked, well-respected head of ANZ Bank, David Hisco, who stands accused of mis-reporting his expenses to the tune of less than $50,000 over several years is just bizarre.

At stake are costs for storing wine in Australia and taking chauffeured car trips, mostly in New Zealand. They were personal expenses which Hisco claimed as business ones.

For an ordinary mortal, “mischaracterising” $50,000 of chauffeured cars (corporate cabs?) and wine storage as business expenses when they were actually for personal use might be worth the effort. But here’s a guy that earned $3.395 million last year alone.

He could have paid for the lot and still had $3.345 million left.

Something doesn’t make sense.

Disappointing departure

ANZ’s New Zealand Chairman and former Prime Minister Sir John Key spoke about “disappointment” that Hisco was leaving the bank in such circumstances.

“It was not about the money itself but the way it was recognised in the ANZ records,” he said. “We as a board and me as Chairman expect transparency not only from our CEO but everyone who works for this company. You have to have trust in what people are recognising in their records. He didn’t meet the standards he set.”

Hisco hasn’t spoken about the departure, and has been on sick leave for the past two weeks. And that’s not euphemistically. No one is disputing he’s been fighting ill-health for a while.

All we know from Hisco’s side is what Key told the press conference: that “he is strongly of the view he was allowed to do [what he did] and was acting within his authority.”

Identical standards

The ANZ top brass is presenting the “mutual parting of company” as the strong actions of a bank cleansed by the transparency of the Australian Royal Commission, as well as by local investigations by the Financial Markets Authority and Reserve Bank.

No longer will misconduct be shoved under the carpet.

“If you are a young teller on the first day of your job or a CEO with 39 years of experience, the standards are the same,” the new acting CEO Antonia Watson said.

But some in the industry are questioning a move which, to them, looks like the ANZ Chief Executive, a sick man, being taken out, put against a tree and shot, for a relatively minor offence.

John Key was known as the “smiling assassin” in his Merrill Lynch days, where he had plenty of experience getting rid of staff. He was appointed chair of ANZ New Zealand in October 2017. See Bernard Hickey’s analysis here on Key’s actions yesterday.

There are some banking CEOs around the world who people might see as egotistical or untrustworthy, one industry source told Newsroom. If we were talking about one of these bosses, a departure under this sort of cloud might not be such a surprise.

But banking sources say Hisco is not one of them.

Respected and trusted

When his replacement Antonia Watson said staff were “shocked and disappointed,” she was speaking the truth. Hisco was respected and trusted inside and outside the bank.

“He was well-liked as a leader… He was known as being open-minded and modern.”

Hisco did a paper round as a kid, saved up his money to buy an HQ Holden when he was 16, the year he started at ANZ in Australia, straight out of school.

Legend has one of his first tasks was sweeping the car park. He was a bank teller, then took himself back to university in Melbourne to study business and accounting, and later did an MBA.

Staff liked that ‘working your way up from the bottom’ part of Hisco, insiders say. He understood what it was like to be on the front line.

‘I’m generally frugal’

In an interview in 2011 Hisco described himself as “generally frugal”.

“I think it’s helpful to have the discipline to avoid making small impulsive purchases. That way money is available to buy the larger things we need.”

Hisco, his wife and his then young family first spent time in New Zealand in 1998-2000 when he headed the UDC Finance subsidiary. They returned to Australia where Hisco developed a reputation as a ‘Mr Fixit’ for the bank.

That was certainly the expectation when he and the family came back to New Zealand in September 2010 – leaving behind, presumably, some wine in storage. Hisco was appointed CEO of ANZ National Bank, the NZ subsidiary of ANZ. His job: to fix the merger mess.

ANZ had bought National Bank from Lloyds TSB in 2003, but subsequent leaders hadn’t managed to bring the two brands together. The software was incompatible, and the National Bank was seen as more upmarket. The company worried about losing customers. But the duplication of the two banks was crazy.

The merger man

In September 2012, Hisco called crunch meetings around the country and announced National Bank was being rebranded ANZ, but the company was adopting the (better) National Bank software system.

The other banks lurked, vulture-like, to pick off disaffected customers. But it didn’t really happen.

“At the time I was highly sceptical of how they could pull the merger off,” says David Chaston, publisher of finance and business website “I thought they had chosen the Tupperware brand over the other one, but I was wrong.

“It was a major achievement in the New Zealand financial scene, and a lot of it came down to David. It would have turned New Zealand upside down if it had failed.”

These days ANZ is this country’s biggest bank, financing 30% of all home loans in New Zealand and holds a 39% share of the rural banking market.

It made almost $2 billion in profit for the year ended September 2019 – a record for the company. And its website reports that ANZ accounts for around 1 percent of New Zealand’s GDP. Its assets are worth more than half of New Zealand’s GDP.

Hisco deserves credit

Hisco must be given credit for the bank’s financial success over the last nine years. But he’s also seen as a good leader.

Watson yesterday talked about how Hisco has championed women in the bank – more than 40% of management roles are now held by women. And he’s been behind promoting Maori, Pacific Island, Asian and LGBT staff in the bank, Watson said.

“Today many of us feel let down and to be fair to David, he accepts as a leader he has to be accountable.”

Industry commentators talk of a CEO who built a strong team around him and trusted them to do their jobs.

The potentially sackable offence

So what happened with the expenses? Newsroom tried but failed to contact Hisco, and Key’s official story about the expenses leaves questions around the seemingly small scale of the expenses problem and the seemingly large scale of the punishment.

Maybe it was plain hubris and greed on the part of Hisco. That’s something that has brought down plenty of leaders before. Few people know what it feels like to earn $3 million a year, to pick up $1 million when you leave under a cloud, or to miss out on $6.4 million of equities for that same cloud.

But Hisco didn’t seem like that kind of guy. He was seen as down to earth, liked sports, thought of himself as frugal, cared about his staff.

Was it the capital?

Another piece of the puzzle may – or may not – involve a different issue – bank capital requirements.

In mid-May, the Reserve Bank rapped ANZ New Zealand firmly over the knuckles for not using an appropriate model to calculate how much risk capital the bank needs to hold. Not only that, for some years, ANZ told the Reserve Bank everything was fine when it wasn’t.

ANZ has apologised.

“A failure of systems and controls, as well as no verification being undertaken by the bank, meant that the ultimate parent bank decommissioned the [Reserve Bank] approved model without the bank ensuring that it had the necessary regulatory approvals in place to move to a new model,” ANZ said.

On June 17, 2019, when speaking to the media, Key downplayed the risk capital issue, blaming “a person junior in the organisation” who made the wrong call, believing they had authority, and then told the board the model was compliant, when it wasn’t.

He said that the difference in the amount of capital ANZ was meant to hold versus the amount it did hold – $23 million – was relatively insignificant given the bank’s total capital.

‘They should both resign’

But others in the banking sector didn’t see it like that. Respected figures, including former BNZ chairman Kerry McDonald, called for heads to roll, including Key’s and Hisco’s – although Hisco was already on extended sick leave by then.

Chaston too can’t see how Hisco – and possibly Key – survived that blunder.

Lack of information

“Someone in the bowels of the ANZ changed how they did the model and didn’t tell anyone, (then) told the directors it was hunky dory. But it went on for years and Hisco and the board should have had a way to check it.

“It’s a huge management failure for which David should have paid with his job.”

David Tripe, Head of the School of Economics and Finance at Massey University banking says it worries him there’s so little information coming out about the alleged expenses problem, and that Hisco doesn’t seem to have been given the right of reply – although Key says there’s no reason he can’t speak out.

“We know very little. But if it turns out he has done something wrong; it could be seen as a sad end to a long and successful career.”

Nikki Mandow is Business Editor at Newsroom. The above article, which appeared in the Newsroom website ( has been reproduced here under a Special Arrangement.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Share this story

Related Stories

Indian Newslink

Previous slide
Next slide


Previous slide
Next slide


Previous slide
Next slide


Previous slide
Next slide


Previous slide
Next slide


Previous slide
Next slide


Previous slide
Next slide


Previous slide
Next slide


Previous slide
Next slide


Previous slide
Next slide