anz chief to lead opes prime review

ANZ chief to lead Opes Prime review
14-April-08 by AAP


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ANZ Banking Group will conduct an internal review of its securities lending practices, led by chief executive Mike Smith.

The review will also examine the bank's relationship to troubled broker Opes Prime.

Mr Smith will be assisted by two senior ANZ executives. The review will examine the oversight and control of ANZ's involvement in securities lending and the development and management of client relationships, the bank said.

It will also assess whether any ANZ employee has breached ANZ's internal policies, procedures and ethical standards in securities lending and dealings associated with the clients of Opes Prime.

''We will review our involvement in the securities lending business and the events surrounding the Opes Prime issue to ensure that all our processes and practices meet the highest ethical, risk management, and regulatory compliance standards which our shareholders and the community expect of ANZ,'' Mr Smith said.

''The review will examine what has transpired, the accountability that ANZ and individual staff members might have for what has occurred, and a remedial program to swiftly address all the issues we identify.''

Mr Smith said ANZ would continue to work with regulators on the issue and publicly release the results of its internal review.

Opes Prime collapsed last month and was placed in receivership and administration after cash and stock movement irregularities were uncovered in a small number of accounts.

The secured creditors of Opes, which included ANZ, subsequently began selling the shares that Opes clients had placed with the failed stockbroker, in a bid to recoup more than $1 billion in loans to Opes.

The move has sparked various legal actions by Opes Prime clients who claim that the shares still belong to them and want them returned.

ANZ shares shares were down 2.4%at $20.43, outpacing a 1.8% fall in the broader market, and have fallen 14% since news of the bank's involvement with Opes and its increase in bad debt provisions broke.

Some brokers have cut their ratings on ANZ and most have cut their earnings forecasts after the bank raised its first-half bad debt charge by 72% to $975 million.

Analysts at Goldman Sachs JBWere said at the time that based on what they had seen to date, ANZ's credit quality ''does appear to be at the bottom end of its peers''.