ANZ GROUP on Monday agreed to pay A$240 million ($159.5 million), the Australian corporate regulator’s largest-ever penalties against a single entity, following systemic failures ranging from acting “unconscionably” in a government bond deal to charging deceased customers.
“Time and time again ANZ betrayed the trust of Australians,“ Australian Securities and Investments Commission (ASIC) Chair Joe Longo said.
The penalty marks a troubling milestone for Australia's fourth-largest bank, which last week announced 3,500 job cuts as new CEO Nuno Matos looks to improve profitability.
Including Monday's announcement, ASIC has brought 11 civil penalty proceedings against ANZ since 2016, with total penalties exceeding A$310 million. ANZ has admitted allegations in each case, according to ASIC.
The latest settlement, requiring Federal Court approval, resolves five separate investigations across ANZ's Australian Markets and Retail divisions. Central to the violations was ANZ's conduct during a A$14 billion government bond issuance on April 19, 2023.
“In the bond trading case, ANZ was in a trusted position and its conduct had the potential to reduce the amount of funding available to the government. This funding is used to support critical services including Australia's health and education systems, affecting all Australians,“ Longo said. “When public funds are put at risk, every Australian pays the price.”
Instead of trading gradually to limit market impact, ANZ sold significant volumes of 10-year Australian bond futures around pricing time, placing “undue downward pressure” on bond prices while assisting the Australian Office of Financial Management’s debt issuance, ASIC said.
The regulator added ANZ misled the government about trading turnover data for nearly two years - information used to select dealers for bond issuances.
Beyond bond trading, the violations revealed widespread customer service failures. Between July 2013 and January 2024, ANZ failed to pay promised bonus interest to new account holders due to system deficiencies.
More egregiously, from July 2019 to June 2023, the bank continued charging fees to thousands of deceased customers, unable to identify which fees should be waived or whether charges after death had been refunded.
“It’s clear we have issues within Australia Retail, particularly around our management of non-financial risk,“ Matos said in a statement on Monday.
ANZ said it would submit its remediation plan to the Australian Prudential Regulation Authority by the end of this month, expecting to spend A$150 million implementing reforms in the financial year ending September 30, 2026.
The bank previously fired or suspended traders from its markets business over the inappropriate conduct allegations - REUTERS
