ANZ is facing $240 million in penalties due to misreporting bond trading data to the Australian government and instances of “widespread misconduct” across its retail products and services.
The Australian Securities and Investment Commission (ASIC) has accused the Australian lender of “acting unconscionably” while managing a $14 billion bond deal, having overstated trading volumes by tens of billions of dollars over nearly two years.
In the retail sector, ANZ is criticized for failing to respond to hundreds of customer hardship notices, making false statements about savings interest rates, and not paying promised interest to numerous customers. Additionally, the bank is reprimanded for not refunding fees charged to deceased customers and for delays in responding to loved ones managing estates.
Proposed penalties for approval by the Federal Court include $125 million for institutional and market-related issues, including a record $80 million fine for unconscionable conduct, and a total of $115 million in penalties for three retail matters.
ASIC Chair Joe Longo stated, “Time and time again, ANZ betrayed the trust of Australians.” He emphasized that these penalties are the largest announced against a single entity and highlight the severity of the breaches and the vulnerable position customers were placed in.
Longo added, “There are fundamental issues with ANZ’s risk and compliance culture that require urgent attention from the Board and executives.”
Since 2016, ASIC has initiated eleven civil penalty proceedings against ANZ, with total proposed and ordered penalties exceeding $310 million.
ASIC Deputy Chair Sarah Court remarked, “The issues identified reflect serious inadequacies across multiple levels and divisions of ANZ, demonstrating a clear failure to manage non-financial risk.”
She noted that as one of Australia’s largest banks, customers expected ANZ to uphold its responsibilities, yet it failed even at basic tasks, such as paying the correct interest rates.
In response, ANZ Chairman Paul O’Sullivan acknowledged the mistakes made, emphasizing their significant impact on customers. He offered an apology and assured that the bank has taken necessary actions, including holding relevant executives accountable.