The departure of ANZ New Zealand chief executive after an expenses review raises serious doubts about the board's ability to run a bank, a former BNZ chair says.

Photo: Photosport

ANZ New Zealand chief executive David Hisco has left the bank following a review which found he had been been passing off charges for chauffeur-driven cars and cost of storing his wine collection as business rather than personal expenses.

ANZ New Zealand chairman Sir John Key said yesterday it amounted to tens of thousands of dollars during Mr Hisco's nine years in the job.

Mr Hisco believed he had authority for this under a verbal agreement, and Sir John said he took him at his word, but the problem was that he didn't accurately record the expenses.

"There was either no transparency, they were bulked up, or they were characterised as business when they were clearly of a private nature."

Former BNZ chairman Kerry McDonald said the problem is that the expenses matter wasn't identified by the Zealand board, but in Australia. "So what was the New Zealand board doing to manage and monitor expenses?"

Mr McDonald has previously called for Sir John and other ANZ leaders to resign after the bank was censured for failing to properly calculate its risk.

"If the ANZ board is not capable of having systems and processes in place that identify problems of this nature - chief executive spending or the way risk is managed - then you've got to have serious doubts about their ability to run a bank."

'Leadership' needed

Prime Minister Jacinda Ardern said this was an employment matter and the responsibility of the bank.

"Ultimately what we are talking about here are matters of personal integrity and employment matters.

"You would expect that those remain the responsibility of the board and the banks themselves.

"Both politicians and those who are leaders in high-profile organisations do need to continually focus on maintaining that integrity."

On whether Sir John Key should step down, Ms Ardern said the expenses issue had been acted on.

"As far as I can see the issue's been raised, the board has acted on it and the CEO is no longer there."

"Ultimately, when it comes to this sector we need to see leadership from within as well. So those are matters for them - we know of course that we need to maintain similar standards in the political world as well."

Mr McDonald said the recent banking sector inquiry was "once-over-lightly". He said the Finance Minister should get directly involved, and it was time the Reserve Bank showed it could regulate the sector effectively, or that there were wholesale changes at the central bank.

But Ms Ardern doubted that the central bank was failing to do enough.

"That's not something I would necessarily have thought was true."

She said the banking inquiry was focused on whether consumers were being treated fairly, rather than the personal integrity of those operating in the sector. "I see those as quite separate issues."

Staff outraged, says union

First Union general secretary Dennis Maga said Mr Hisco's actions were especially galling when members worried about staffing levels and pay were told the bank was trying to cut costs.

"Some of our members were really outraged because of that lavish lifestyle that he had," said Mr Maga. "I think that actually warrants his dismissal."

He said tellers were paid $40,000-$70,000 on average, compared with Mr Hisco who was being paid $3.8 million and would get a final payout of $2m.

"That is an unfair treatment... where a CEO is receiving a special treatment from the company compared to an employee of the bank who can be disciplined or can be dismissed if ever they committed the same mistake."

Consumer NZ head of research Jessica Wilson said the bank's customers were likely to take a dim view of the expenses, given they were the ones ultimately paying for them.

"It indicates there was some sort of culture of excess going on, that a chief executive thought that this is what he should be entitled to as well as a very generous salary - that other expenses such as this should be covered as well."

Ms Wilson said consumers were rightly asking questions about the banking industry's bumper profits, why charges were so high and, now, whether that was going into banking products, or luxury pastimes.

This would do little for their trust in banks, for which ANZ ranks among the worst, she said.

"Banks have been keen to reassure consumers that they've got our best interests at heart, that they're responsible, and there's no need for any stronger regulation. But when you see stories like this come out it really does call into question those assurances."

'Is it really that bad?"

Australian Financial Review senior financial services writer James Frost said the expenses controversy played badly, but the amount, over a decade, was possibly just $2500 a year.

"I do wonder whether the calls for ... John Key to resign are perhaps going a little bit overboard".

Transparency was vital in this new era of banking, so if things of this nature were discovered something needed to be done, he said.

Institute of Directors general manager of the governance leadership centre Felicity Caird said organisations must have clear rules for reasonable expenses, rather than what Sir John described as a verbal agreement between Mr Hisco and a former chief executive.

"Personal expenses are personal expenses and should be paid for personally, and business expenses are business expenses. So if somebody were to characterise a known personal expense as a business expense, that would be inappropriate," Ms Caird said.

It was up to the board to make sure the chief executive's expenses were closely and regularly scrutinised, Ms Caird said, and ANZ did the right thing launching a review three months ago.

No need for direct govt response - Robertson

Finance Minister Grant Robertson said while he did not see the need for any direct government response, ANZ still had questions to answer.

He said the Reserve Bank was in discussions with ANZ, "particularly around the disclosure of when this occurred and making sure that the ANZ did fulfil their requirements there".

Mr Hisco's departure did not necessarily raise any broader concerns about the conduct of the backing sector, he said.

But one question for the government was whether the Reserve Bank had the necessary powers as the banking sector regulator, and that was already under review.

Mr Robertson said in this case there were those more directly affected. "The ANZ board and shareholders - I'm sure there will be ANZ shareholders and staff members who will be very disappointed in what they've seen here, but I don't think that necessarily means there's a systemic issue."

The public would make its own judgement about the level of salaries paid to bank executives, and whether the board had acted appropriately.