Australian lender says it should have better talks with customers
SYDNEY, June 25, (RTRS): Australia and New Zealand Banking Group Ltd said it failed to talk thousands of farm borrowers through a takeover of their former lender, adding some customers may have left if they knew it planned to hike fees immediately after the acquisition.
The admission from Australia’s third-largest lender on Monday came as a powerful public inquiry into finance sector misconduct turned its attention to the country’s $50 billion agriculture industry.
ANZ has previously apologised for its treatment of some of the 7,000 customers it inherited in a troubled 2010 takeover of the former wheat board’s financial services arm, Landmark Financial Services, amid media and parliamentary scrutiny.
But acknowledging it fell short of community expectations at the socalled Royal Commission adds to widespread expectations that the inquiry will recommend more regulation of rural lending, including a compulsory national farm debt mediation scheme.
“We should have done a better job of the way we communicated that to Landmark customers,” ANZ’s head of corporate and commercial lending, Benjamin Steinberg, told the inquiry, referring to the fact that the bank was taking them on as customers.
“A lot of these Landmark customers have never dealt with a large financial institution before, like ANZ. Some of the customers felt that had they been advised earlier they may have made a decision to refinance their finances from Landmark before the acquisition occurred.”
In a letter ANZ sent to Landmark customers soon after the deal, read out at the inquiry, ANZ said it had the right to change fees, charges and interest rates, and to cut its notice period to 30 days from 60 days if it wanted to change contract terms. The bank also told customers they were required to open an ANZ account.
Asked about another ANZ internal document, read out at the inquiry, suggesting it planned to boost revenue by A$6 million by hiking fees to Landmark customers, Steinberg said “the view at the time was that the Landmark book at the time was relatively underpriced (and) there was an opportunity to have a revenue uplift through repricing”.