CFO steps aside over ANZ card blunder

The blunder, which has resulted in both the bank's head of card issuing and the consumer finance businesses' chief financial officer stepping aside, relates to an ``under-accrual" of loyalty points since 1999.

Cardholders who use the co-branded Qantas ANZ card overseas should have been awarded two points instead of one for every dollar spent, while there was a similar problem with the Qantas ANZ Business One card offered to small businesses.

A spokesman said the bank had appointed a new head of card issuing, Jenny Fagg, and was recruiting a new chief financial officer for the consumer finance division.

The mistake was discovered during a review of the bank's card business in the wake of the Reserve Bank's credit card interchange reforms.

The spokesman said there would be no flow-on effect for fees on credit cards from the one-off charge, though the bank was still undertaking a strategic review of the whole business.

ANZ shares still rose 62c to $16.57 on a good day for the banks, even though the first half is likely to now be weaker than the second.

The bank also disclosed several favourable developments including $16 million gain on bonds traded through the Indonesian bank, PT Panin Bank.

While ANZ has confirmed the 8 per cent profit rise it predicted at its annual meeting, ANZ has now succeeded in gradually lowering market expectations from double-digit growth at the time of its full-year result in October.

ANZ also reported that it was seeing strong growth across its personal and corporate banking operations, though the first half for the ING Australia joint venture has been flat and the bank has felt margin pressure in the core banking operations.

ANZ, which made the disclosures during a meeting for NZ shareholders in Auckland yesterday, also said the credit quality of the portfolio continued to improve, though it was cautious about parts of the offshore banking portfolio, including the US energy sector.

``Despite the problem in our credit card issuing business, recent overall momentum has been good, expenses are being managed well, and international credit issues appear containable," chief executive John McFarlane said.

Wilson HTM's analyst Brett Le Mesurier said the positive theme to emerge from ANZ's statement was that the bank was enjoying continued strong residential mortgage lending.

The 6.4 per cent growth in mortgage outstandings reported for the first four months was ``similar to the Commonwealth Bank result and is a reflection of the increasing impact of mortgage broking in the market", he said.