ISCOVER
The major bank has accepted allegations of misconduct and will face penalties of $240 million tied to four separate proceedings spanning misconduct across its Institutional and Retail divisions.
Australia and New Zealand Banking Group (ANZ) has agreed to pay a penalty of $240 million covering four different investigations into the bank and linked to misconduct over several years
The penalties, which are subject to consideration and approval by the Federal Court, include $125 million for institutional and markets matters, including a record $80 million penalty for unconscionable conduct, and $115 million in total penalties for three retail matters.
Under the agreement, ANZ is subject to penalties related to four matters, including:
- Its conduct whilst managing a $14 billion bond deal with the Australian Government, which included incorrectly reporting its bond trading data, overstating volumes by tens of billions of dollars over almost two years.
- Failing to respond to hundreds of customer hardship notices, in some cases for over two years, and failing to have proper hardship processes in place.
- Making false and misleading statements about its savings interest rates and failing to pay the promised interest rate to tens of thousands of customers.
- Failing to refund fees charged to dead customers and breaches of obligations concerning deceased estates.
The Australian Securities and Investments Commission (ASIC) said ANZ’s misconduct marked a “significant failure to manage non-financial risk” across the bank.
ANZ stressed that, in its view, no loss was caused to the Commonwealth from its trading as duration manager. However, the major said that given ANZ "could have executed its role as duration manager with better communication", it had offered to pay the AOFM the revenue it earned as duration manager as a goodwill gesture.
In a statement made on Monday (15 September), ANZ chairman Paul O’Sullivan acknowledged that the bank had “made mistakes that have had a significant impact on customers”.
"On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable," O’Sullivan said.
ANZ chief executive Nuno Matos said: “The failings outlined are simply not good enough and they reinforce the case for change. 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”.
Commenting on the Australia Retail business matters, Matos added: “Unfortunately, some of our failings occurred when our customers were at their most vulnerable. For this we are deeply sorry, and we are making changes to better support our customers when they need us most. We have in place customer remediation programs for the issues announced today."
Speaking about the penalties, ASIC chair Joe Longo said: “Time and time again ANZ betrayed the trust of Australians.
“The total penalties across these matters are the largest announced by ASIC against one entity and reflect the seriousness and number of breaches of law, the vulnerable position that ANZ put its customers in and the repeated failures to rectify crucial issues,” he added.
“Banks must have the trust of customers and government. This outcome shows an unacceptable disregard for that trust that is critical to the banking system.
“There are fundamental issues with ANZ’s risk and compliance culture that require the board’s and executives’ urgent attention,” Longo finished.
ASIC has now brought eleven civil penalty proceedings against ANZ since 2016, with proposed and ordered penalties totalling more than $310 million.
The fine by ASIC adds to pressure on ANZ, which last week announced it would make around 3,500 employees redundant by September 2026 to “simplify the bank, strengthen its focus on its priorities, and deliver for its customers”.
The Finance Sector Union slammed the major the decision.
ANZ was also forced to confirm that no decision had been made about the future of Suncorp Bank, despite reports in The Australian that the brand will pull its products from market next year.
[Related: ANZ refutes Suncorp Bank mothballing rumours]
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