ANZ investors are concerned about whether the bank has the right controls in place and whether acting chief executive Antonia Watson should be ruled out of the top job because of her links to the controversial property sale to David Hisco's wife.
And they say the fiasco could not have come as a worse time for the banking sector which is trying to lobby against proposals by the Reserve Bank to increase the capital held by banks.
Matthew Goodson, managing director of Salt Funds Management, said as an ANZ shareholder he was not very happy about the expenses scandal that resulted in Hisco's resignation. But he believed it was a matter for shareholders to sort out.
"It is immaterial in itself. But what it does do is speak to the controls that are in place."
Goodson said it was difficult to say if changes need to be made at board level given it was hard to say who knew what and when.
"The key thing we are focused on for ANZ is the actual detail of the RBNZ capital proposals. That could be quite material."
The Reserve Bank is proposing to nearly double the level of tier one capital banks hold and submissions are due to be released publicly on the proposal on Monday.
Another senior market player said the scandal could not have come at a worse time for the banking sector.
"This ANZ scandal had come at a time when the banks are in the middle of a stoush with the Reserve Bank governor Adrian Orr about increasing capital.
"There has been an enormous amount of lobbying going on behind the scenes."
He said the capital changes would be significant for shareholders but the bank lobbyists would be struggling to get the ear of anyone in Wellington in the face of the ANZ scandal.
"They won't even look them in the eye."
There has always been some discontent with the remuneration packages of the Australian-owned New Zealand bank chiefs with some believing they were out of step with New Zealand culture.
To find out there were other expenses on top of those already heady remuneration packages has sent the business community into overdrive.
The revelation that ANZ sold a luxury St Heliers Bay mansion to the wife of its former boss David Hisco for what appears to be less than a market price has raised eyebrows further.
The investment source said it wasn't a good look for acting ANZ boss Watson who was a director on ANZ's property company Arawata Assets when the deal took place. It was Arawata that sold the house.
He said it should rule her out of the top job.
ANZ has said the bank bought the house when Hisco arrived in New Zealand and the housing allowance Hisco received offset by the market rent he was required to pay ANZ.
It says the house was sold by the bank to Hisco's wife based on market valuations. But it has declined to answer questions about tax on the house citing employment contract confidentiality.
"As much as the ANZ doesn't want to comment on this because they say it is an employment issue," the investor said.
"It needs to become a criminal matter or they need to open up about it."
If the bank wanted to regain public confidence they needed to explain what happened. "Was this part of his contract? Were the taxes correctly paid."
He said the scandal was weighing on the bank from the shop floor up.
"The thing we are hearing is inside the bank staff morale is in terrible shape - all the way down to the teller level they are feeling the brunt of it.
"Their brand name has been tarnished there is no two ways about it."
But Andrew Bascand, managing director of Harbour Asset Management, said the bank was being proactive and pointed to a major presentation by ANZ Group chief executive Shayne Elliot addressing conduct and culture at the bank last week.
"They have fronted up. They have established a new role of customer fairness adviser which will report directly to the chief executive.
"I think they are taking this pretty seriously."
He said Elliot went through all the findings of the Australian Royal Commission and the actions they propose to take.
He said the bank had admitted it had at times had poor product governance and design and did not focus on remuneration when it came to poor conduct.
Bascand said so far the ANZ share price had held up in the face of the scandal and said there were no indications there had been any significant damage to the brand.
"We haven't seen the share price reaction."
"There is no indication the brand has been significantly damaged at the moment."
Bascand said shareholders would be most concerned about the proposed capital changes and that issue would hit ANZ harder than the other banks because New Zealand made up such a large part of the business.
• March - Annomalies were discovered in the way David Hisco was recording his expenses after the Australian chief executive Shane Elliot undertook a review of executive team.
• May 17 - ANZ Censured by Reserve Bank for not using an approved model for working out its capital
• May 29 - ANZ informs Reseve Bank of New Zealand about the Hisco investigation
• May 30 - Staff are told Hisco is taking extended sick leave
• June 17 - ANZ announces Hisco is leaving the company as board board reveals they are not happy with way he "mischaractised" expenses.
• June 21 - ANZ NZ board called to a "please explain" meeting with the Reserve Bank. Hours later it emerges ANZ sold a luxury property to David Hisco's wife for below the market price
• June 24 - Reserve Bank demands two independent reports from the ANZ on compliance with capital adequacy and directors attestation and assurance framework.
• June 28 - Financial Markets Authority says it is looking into related party transactions in ANZ's financial statements in response to the sale of the house to Hisco's wife.