Bank admits to widespread failures across bond trading, hardship response, and interest payments
Following regulatory action over its misconduct in both government and customer dealings, ANZ has acknowledged that its failings are “simply not good enough” and has committed to significant reforms.
The bank’s chief executive, Nuno Matos, said the issues identified by the Australian Securities and Investments Commission (ASIC) reinforce the need for change across the organisation, with the Federal Court now considering penalties totalling $240 million.
ANZ has admitted to a series of breaches, including misreporting bond trading data to the Australian government, failing to address customer hardship notices, not paying promised interest to customers, and charging fees to deceased customers without timely refunds. The four proceedings before the court cover misconduct in both ANZ’s Institutional and Retail divisions, with penalties proposed for each.
“The failings outlined are simply not good enough and they reinforce the case for change,” Matos (pictured right) said. “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.
“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.”
According to Matos, customer remediation programs have been placed for the issues involving its failings.
“It’s clear we have issues within Australia Retail, particularly around our management of non-financial risk (NFR),” the ANZ executive said. “This is why we are making changes to this business to improve its focus on core priorities and to make it safer for customers.
“We have fast-tracked work to significantly improve our management of non-financial risk across the ANZ Group. My team is heavily engaged in this work, while Les Vance’s recent appointment to lead our NFR program has strengthened our leadership in this space.”
The proposed penalties comprise $125 million for institutional and markets matters – including a record $80 million for unconscionable conduct – and $115 million for retail-related breaches. The Federal Court will determine whether the penalties are appropriate and may make further orders.
The misconduct included overstating secondary bond turnover data to the Australian Office of Financial Management (AOFM) for nearly two years, which could have influenced the government’s selection of bond dealers. ANZ’s trading practices during a $14 billion bond issuance also placed downward pressure on bond prices, with the government not informed of the bank’s remaining volumes to sell. The bank has admitted to acting unconscionably and misleading the government, agreeing to pay a combined penalty of $125 million for these matters.
In retail banking, ANZ failed to respond to 488 customer hardship notices between May 2022 and September 2024, sometimes taking over two years to reply. The bank also did not pay promised bonus interest to thousands of customers due to system deficiencies, with remediation efforts ongoing. In addition, ANZ charged fees to deceased customers and did not process refunds or respond to estate representatives within required timeframes. The bank has remediated affected accounts and apologised to those impacted.
“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,” said ANZ chairman Paul O’Sullivan. “On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable.”
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