Sir John Key is stepping down as chair of ANZ in New Zealand. Photo / Greg Bowker
Sir John Key tells of new personal adventures - including a relatively new house in Hawaii - as he looks forward to more time with his wife Bronagh and family following his retirement as chair of ANZ New Zealand.
Former Prime Minister Sir John Key chuckles about a text he received on Monday night from the man who will replace him as ANZ chair, Scott St John.
“He sent me a text last night that said ‘Do you think the Herald headline will be ‘ANZ replaces knight for saint’?” laughs Key.
That’s not bad, I say.
“And I said - it could be ‘Just another John’. So you can choose whichever one you like!”
Key is in a jovial mood on Tuesday morning, relaxing over coffee in an armchair in his high-rise office in the ANZ Centre in central Auckland. Just minutes earlier, his resignation as ANZ chair - and as a director of the ANZ group board - was announced to the NZX.
More than seven years since his retirement from politics - he spent 15 years in Parliament including eight years as Prime Minister - the 62-year-old says: “I probably came to the realisation that arguably I’m doing more work than maybe I anticipated.
“There comes a time, I think, where you need to think about what a more realistic view of retirement looks like.
“Bronagh and I had quite a big discussion over Christmas, and I just said to her, ‘Look, I think it makes sense for me to lighten the load’. It effectively leaves me with a schedule of things which are either relatively straightforward or virtual.”
The commitments to ANZ both in New Zealand and Australia led to a hectic travel and meeting schedule, he says. It was taking up about 40 per cent of his working time.
While he still sits on several private boards, including as a director for US tech giant Palo Alto Networks, he now frees up a substantial amount of time to be with his wife Bronagh and family and see more of the world.
Key says the plan is to “definitely spend more time in Hawaii”.
He and Bronagh bought a new house overlooking the ocean on Maui just before the Covid pandemic - it needed “massive work”, he says, and they were looking forward to the fruits of that in 2020.
“We got the architect and the builder and the designer and all these people along in January of 2020 and said, ‘right, well we’ll be back in March’.
“Yeah, well good one,” he says, reflecting on the pandemic.
“We got back all right in March - in 22 or 23, I think.”
New Zealand, he says, is “still very much home”, but he and Bronagh will now have more time to travel.
“We’re here about probably eight months of the year. The plan is to probably spend a couple of months in Maui and a couple of months in various other locations around the world.”
This year marks his and Bronagh’s 40th wedding anniversary. He says she estimates he’s been home for about six of them - and two of those were when “Jacinda locked me in the house!”
“I said [to Bronagh]: ‘Just be careful when you get to know me... you may not like me!’”
He’s also looking forward to swinging the golf clubs and taking to the skies, having passed his helicopter’s licence last July.
“I don’t know whether I’m getting better or worse [with golf]. Certainly, my handicap would indicate I’m getting worse.”
Mostly he’s looking forward to a more relaxed retirement, with more flexibility.
Key reveals another bank had approached him after he left politics and before he joined ANZ in January 2018.
A critical part of the deal was him being on the ANZ group board.
“In asset terms - and it always depends on how you measure it - but the group has about a trillion-dollar balance sheet, and in New Zealand we have about a $200 billion balance sheet, so it’s a big exposure.”
He said he’d loved his time with the bank and was proud of what the business had achieved.
“It’s never easy when you’re the big incumbent player, but banks are really the beating heart of the economy.
“They are a bellwether with how things are going and we have enormous responsibility.
“Literally hundreds of thousands of New Zealanders rely on us to allow them to fulfil their dreams, whether it’s buying a home or starting a business or going on a holiday.
“We are the custodians of both income and savings but also in many cases, the retirement savings through KiwiSaver.”
We turn to inflation - and the cost-of-living crisis impacting so many Kiwis.
ANZ’s chief economist Sharon Zollner and her team have gone out on limb in recent weeks, predicting the Reserve Bank will lift the OCR by 25 points tomorrow and by the same amount in April - meaning it will reach 6 per cent from its current level of 5.5 per cent.
The bank’s economists have pushed back their forecast for interest rate cuts from this August to February 2025.
“The first thing I’d say is that it’s really critical and wholly appropriate that our analysts and economists are completely independent,” says Key.
“They don’t know our book. They don’t consult us.
“In fact, I read Sharon’s call on the Herald website like everybody else when it got released. I could probably honestly create an argument with you about why she’s right and why she’s wrong.”
Key says he doesn’t know how rates will fare in the short term, but he’s confident about the longer-term downward trend.
“If you look globally, there’s a mixture of data, but I don’t think there’s any doubt that overall, the trend for inflation will be lower. It’s just a question of when. I would have thought even if they were to raise rates now they’ll still be cutting by the early part of next year.”
Key says ANZ is seeing some stress from mortgage holders in its book, but nothing like during the global financial crisis in 2008.
“We work with every customer. We just encourage them to come and talk to us because it’s in nobody’s interest to have a mortgagee sale of a property.
“It’s horrible politics from a bank’s point of view.
“It can be the right thing, actually, for the customer to sell the home. But you want them to do it in a sensible and controlled way. But it also may not be the right thing.
“So we do everything. We’ll work on different structures - everything from the duration of the loan to suspending various payments.
“We work with our customers. We all say we don’t write an individual loan, we bank a customer.”
Key says he doesn’t miss politics, saying he tends to focus on his current roles. “I’m quite good at looking forward and not really looking back.”
He and Christopher Luxon had breakfast on Sunday morning. “I can live vicariously through the Prime Minister now!”
What he does know is the intensity of the job.
“It really is six-and-a-half days a week, pretty much 18 hours a day. I kind of look at it and say ‘I’ve been there and done that’.
“In the old days, lots of people used to say ‘come back’ or whatever, but I always used to think twice. I had a great run, I didn’t get everything right.
“When we appointed Antonia [Watson] as CEO here at the bank - and she’s really done a tremendous job - I always said to her, ‘Look, the one piece of advice I can give you is that when you ultimately retire you won’t regret, for the most part, the things you did... it’ll be the things that you didn’t do’.”
Later in the interview he makes passing reference to New Zealand needing longer political terms. “It should be four years, maybe more, you know... but I also think we should have a new flag!”
Luxon, he says, is “running at 100 miles an hour” and “doing very well” - an unsurprising observation from Key.
But he does note the unique situation that Luxon has found himself in.
“They are a three-way coalition - that’s both unusual and it comes with its challenges.
“Quite a lot of the agenda of his coalition partners has been around race. That’s been a heavier focus than the National Party would have had, for instance, if it was in a position to govern on its own.”
The party would have addressed any race concerns, but “there’s no way it would have had a Treaty principles bill, for instance”.
“What I’ve always said to him - which I genuinely believe - is that elections are won and lost on four critical issues: the economy, law and order, health and education.
“And I think it’s critically important that, if he’s going to win the respect of the voters that he is the right person for the job, they are the issues he has to deliver on.”
Race issues are critical “but I don’t think it’s as nearly as critical as whether people have a job or feel safe in the community or feel like they’re getting the healthcare support they need”.
Key - who received about $770,000 for his two ANZ roles last year - is stepping down two years earlier than he needed to.
He says he could argue both ways about the duration on boards.
“In theory, you could stay longer, but it’s kind of seen as hygiene and good governance that you go after nine years. Some people go before and some people go a little bit longer.
“I can certainly create an argument that maybe directors should stay longer. I could also create an argument with you that with the sheer workload, fresh eyes and thinking is a good thing.”
He says it’s not his intention to join another public company.
Rather, he and Bronagh are planning to see more of the world - and perhaps also to visit some old friends.
Barack Obama, he reveals, wanted a round of golf recently. He’s still close with David Cameron and in touch with a host of former Australian prime ministers.
In a message to ANZ staff today, Key said he’d loved his time with the bank.
As we close off our interview, he says: “I think it’s easy to throw stones at bank profitability, but it is really worth understanding the scale of our business.
“It’s not just a $200 billion balance sheet. We’re the largest corporate taxpayer in the country. We’re the largest investor of capital in business with $17 billion.
“So yeah, while nominally the amount of money looks large, it’s a tiny fraction of the risks and the scale of what we deal with.”
ANZ stopped accepting deposits into others' accounts last year.