Inquiry hears ANZ bankers reported watchdog, Rabobank lender had conflict of interest

THIRTY ANZ bankers were reported to the corporate watchdog, while a Rabobank lender had a conflict of interest, the banking royal commission has heard.

ANZ reported scores of its bankers to the corporate watchdog for falsely claiming to have witnessed customers sign important forms, the financial services royal commission has heard.

And the problem, which was rooted in the bank’s wealth management division, may have extended to other parts of the bank, a senior executive has conceded.

But ANZ head of lending services Benjamin Steinberg, appearing at the commission on Wednesday, said he was not sure if the bank had investigated how widespread the problem was.

ANZ told Business Daily on Wednesday night it had “processes in place to investigate inappropriate behaviour and does not tolerate false witnessing of documents”, but would not say if a specific investigation had taken place.

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Counsel assisting the commission Rowena Orr, QC, presented documents on Wednesday on the poor treatment by the bank of Handley Group, run by Queensland cattle farmer Elizabeth Handley.

ANZ head of lending services Benjamin Steinberg. Picture: AAP

The cattle-grazing company was battling a combination of “droughts, floods and fires”, the commission heard.

ANZ refused to put off mediation with Mrs Handley even after she had been diagnosed with cancer, it heard.

A staff member at the bank also falsely witnessed some of Mrs Handley’s documents, Ms Orr said.

She said ANZ, in a document given to the commission, revealed it had reported more than 30 financial advisers to the Australian Securities and Investments Commission for falsely claiming to have witnessed customers sign beneficiary nomination forms.

Ms Orr asked Mr Steinberg if falsely witnessing documents was a practice that extended beyond the bank’s wealth management business.

“My understanding is that the lady involved (in the Handley case) was a branch manager,” Mr Steinberg replied.

Cattle farmer Wendy Brauer leaves the hearing on Wednesday. Picture: AAP

Ms Orr put it to him that this meant “the issue extended beyond the wealth business”, to which he responded: “Yes”.

Asked what steps the bank had taken to investigate the scale of the problem, Mr Steinberg said he did not know.

Ms Orr had previously revealed how ANZ thought it could become a major agribusiness lender through its 2010 buyout of the Landmark Financial Services loan book.

ANZ picked up 10,000 agribusiness customers, but about a third of the loans soon proved problematic, at high risk of default or impaired.

Asked about Landmark and ANZ’s lending culture broadly, Mr Steinberg said there were not “systemic” problems.

“I have acknowledged there are issues … (but) in the time that I’ve been in lending services, there have been thousands of customers that have come in and out,” he said.

Separately, cattle farmer Wendy Brauer told the commission of the “financial and emotional cost” after she took advice from a manager at Rabobank — a Dutch lender prominent in Australia’s agricultural sector.

While living in the US in 2009, Mrs Brauer and husband Adrian acted on their Rabobank manager’s proposal that they buy another cattle property, called Jamberoo.

It left the family at least $1 million in the red, Mrs Brauer said. The commission heard the bank manager had a conflict of interest over the sale, including that the vendor was also a client.

Mrs Brauer said she had trusted a bank specialising in agricultural finance.

“I recommended these jerks to other people and said what a great experience they were and how understanding they were,” she said. “They put us backwards.”

“They came hunting for us. They came looking for us to buy this block. And 12 months later they wanted us to pay them back more than what we had borrowed. I don’t understand.”

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