Appearing before a parliamentary committee on Friday, Mr Elliott commented many customers receiving remediation wouldn’t have known there was an issue at the time, pointing to himself as an example.
The bank is in the process of working through 247 problem products and around 250 issues, assessing customers and determining whether they were charged the wrong interest or fees.
The majority of issues were said to be associated with the banking division, rather than the wealth segment and advice “fees for no service”.
“So the million customers that we’ve refunded today, most of them got a cheque in the mail and a nice little letter and they didn’t even realise it,” Mr Elliott said.
“I’ve had three. One was $30, one was $27 and one was $80. The average amount that’s being repaid out, you can do the maths.
“It’s important we get the money back; I’m not diminishing that. But we are remediating every single case. There’s nothing to do with complaints. This had to do with we have discovered a mistake, and we have gone and put it right.”
Mr Elliott predicted there are around 3.4 million customers in total who are owed refunds from the bank, with around one-third having received their remediation.
ANZ has set aside $1.6 billion in reserves for remediation, with the amount that has been refunded so far ($167 million) being around a tenth of that.
Mr Elliott conceded the bank’s progress through returning customers’ money has been “modest”.
“We’ve taken provision of around $1.6 billion of that, maybe around $400 million has more to do with cost,” he said.
“That’s the cost of getting the money back.”
The bank now has 1,100 staff working sorely on remediation, with a further estimated 600-700 full-time employees lending a hand from other departments. ANZ has around 38,000 staff in total.
Mr Elliott said ANZ will give the remediation team all of the resources it needs.
“That team has no restriction on number of people they need to hire, none. They can hire as many people as they want,” Mr Elliott said.
“They have no budget restriction. Yeah, the restriction in a sense, the binding constraint, if you will, is not money or headcount, its expertise.
“We want to finish those [remediation programs] and find any other problems we have. We have a productive program where we are searching through every single product and process we have to see if there’s anything that needs remediating, big or small, we add it to the list and we get it done as fast as possible,” he said.
Despite the bank’s remediation process having had a gradual pace, as far as Mr Elliott is concerned, it is in the bank’s best interest to complete the refunds as fast as it can.
“My shareholders have already paid the $1.6 billion, it’s gone from their accounts, it’s gone,” he said.
“So when we take that provision, we’ve expensed it. So there is no benefit in delay. So now actually, there’s benefit in speed because the delay costs money because the longer [it is], the accrued interest keeps mounting up, and I have to pay more and more.
“There might be a perverse incentive to not discover issues, if that makes sense. But once you’ve discovered them, we have a legal obligation to provide and expense the money. The 1.6 billion, as far as we’re concerned is we’ve spent it – so now the sooner we get that money back to customers, the better.”
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
