ANZ to pay A$240 million fine on bond errors, retail mistakes

Asic and the bank will ask the Federal Court to impose the penalties in relation to four separate proceedings spanning misconduct across the bank’s institutional and retail divisions

ANZ Group Holdings will pay a A$240 million (S$205 million) fine after admitting misconduct across its institutional and retail divisions, the culmination of a months-long investigation by the corporate watchdog into one of the country’s biggest lenders.

The bank overstated bond trading volumes by “tens of billions of US dollars” and engaged in “widespread misconduct” across products and services, impacting nearly 65,000 customers, according to a statement from the Australian Securities & Investments Commission on Monday (Sep 15).

Asic and ANZ will ask the Federal Court to impose the penalties in relation to four separate proceedings spanning misconduct across ANZ’s institutional and retail divisions, according to the statement.

“The failings outlined are simply not good enough and they reinforce the case for change,” chief executive officer Nuno Matos said in a separate statement. “It is my expectation that we see measurable improvements across the bank to better protect and care for our customers and to create a more sustainable business.”

Matos is four months into his role leading Australia’s second-biggest bank by assets and is in the midst of a broad overhaul that includes some 3,500 job cuts. He’s also revamping ANZ’s senior risk and compliance positions to win back the trust of regulators.

Here’s a breakdown of the fines:

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• A$85 million for ANZ’s role as duration manager in the execution of a 2023 Treasury bond issuance by the Australian Office of Financial Management
• A$40 million for submitting inaccurate monthly secondary bond turnover data to the AOFM over a two-year period
• A$40 million for its failure to pay the acquisition bonus interest on certain savings accounts and displaying accurate rates
• A$40 million for breaching its obligations in relation to the handling of customer hardship notices
• A$35 million relating to breaches of its obligations concerning deceased estates

“While we have worked hard to get regulatory certainty on these matters, the reality is we made mistakes that have had a significant impact on customers,” ANZ chairman Paul O’Sullivan said in the statement. “On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable.”

ANZ also said that it has appointed Promontory as an independent expert to review its progress on what it calls its Root Cause Remediation Plan to the Australian Prudential Regulation Authority.

“The board has driven comprehensive accountability reviews in relation to the markets issues which have resulted in significant reductions in remuneration for certain current and former executives,” O’Sullivan said. “We will also ensure there is further accountability for the Markets and Australia Retail matters as part of this year’s executive remuneration review process.” BLOOMBERG