ANZ Bank New Zealand Limited’s (ANZ) Condition of Registration 11 requires ANZ to comply with the Reserve Bank of New Zealand document “Outsourcing Policy” (BS11) dated September 2022 (Outsourcing Policy).
The objectives of this policy are to ensure that an outsourcing arrangement entered into by a bank does not compromise that bank’s ability to–
a. be effectively–
i. administered under statutory management; and
ii. operated for the purposes of continuing to provide and circulate liquidity to the financial system and the wider economy; and
b. facilitate the carrying on of basic banking services by any new owner of all or part of the bank; and
c. address the impact that the failure of a service or function provider may have on the bank’s ability to carry on all or part of the business of the bank.
Requirement to maintain robust back-up capability
Under paragraph B2.8 of BS11, ANZ is required to maintain robust back-up (RBU) capability that would effectively operate in the event of a separation to ensure ANZ continues to meet the outcomes set out in paragraph B1.1 of BS11.
On 6 November 2025, ANZ notified the Reserve Bank of a breach related to its RBU arrangements. As a result, ANZ breached paragraph 2.8 of BS11 as it did not have RBU capability in place (or an approved alternate arrangement) for impacted applications. This means that upon separation, ANZ has reduced ability to meet the outcomes under paragraph B1.1(3)(b) (monitor and manage financial positions) and paragraph B1.1(3)(d) (provide basic banking services) of BS11.
Based on the information provided by ANZ and the nature of the non-compliance, the Reserve Bank has confirmed the breach as a material breach of condition 11 of ANZ’s Conditions of Registration.
Overall deficiencies in BS11 oversight, processes and controls
For the period 1 April 2024 to 30 September 2025, ANZ reported a number of non-compliance with BS11 requirements with majority of the breaches relating to failures around risk mitigants and compendium breaches. However, there were also breaches relating to failure to maintain effective alternate arrangements and RBUs which impacts ANZ’s ability to separate.
The Reserve Bank has assessed each of these breaches to be individually a non-material breach of condition 11 of ANZ’s Conditions of Registration. However, when assessing materiality of breaches, the Reserve Bank undertakes a holistic assessment of the findings and has considered that the number and nature of instances of breaches indicate overall deficiencies in ANZ’s BS11 oversight, processes and controls. While these issues had no financial impact, they are relevant to the Bank’s outsourcing and resolvability requirements and therefore, the Reserve Bank has concluded that collectively, the instances of BS11 breaches constitute a material breach of condition 11 of ANZ’s Conditions of Registration.
ANZ has rectified the specific breach relating to the robust back-up arrangements and is undertaking broader work to strengthen processes and controls in the ongoing management of BS11, as part of a remediation programme that will need to be completed to the RBNZs satisfaction. The Bank will keep the RBNZ informed about the progress of these efforts to ensure that the necessary uplift is delivered and deficiencies are remediated.