ANZ Storm cloud could get bigger

The bank also revealed a staff member at a branch on Queensland's Sunshine Coast who had approved loans for Storm customers outside ANZ guidelines was a client of the high-risk financial planner.

The ANZ staffer failed to comply with bank procedures when she authorised loans on behalf of Storm clients, the bank's deputy CEO, Graham Hodges, said yesterday. The woman, who has since quit, was even taking loan referrals from interstate Storm clients, bypassing usual practice of loans being managed by local branches.

Mr Hodges' comments were part of the bank's evidence to the Ripoll inquiry into financial products and services.

ANZ's involvement with Storm is not as deep as that of rivals Commonwealth Bank and Bank of Queensland. However, it marks its second troubled relationship, after ANZ emerged as a key lender to collapsed stockbroker Opes Prime.

The Melbourne-based ANZ had no formal links with Storm. Indeed the bank had knocked back the financial planner's proposal to strengthen ties.

Mr Hodges told the inquiry Storm's business model was "incomparable" with ANZ's lending policies. Under the proposal, the bank would effectively outsource the customer relationship to Storm, he told the joint parliamentary committee sitting in Melbourne.

After ANZ rejected Storm's overtures, he said, Storm no longer wanted to deal with it.

In its submission to the inquiry, released last week, ANZ said some 160 customers took out loans or drew on mortgages to fund Storm investments.

However, Mr Hodges said, there would "probably be more" loans emerging as the bank reviewed its lending book. About 20 ANZ customers had fallen into arrears or experienced hardship due to exposure to Storm. Mr Hodges said they were being dealt with case by case, but the bank intended "to ensure no one loses their home as a result" of their exposure to Storm.