The Australia and New Zealand Banking Group (ANZ) has agreed to pay $240 million in misconduct fees, as the banking giant undergoes a cultural and organizational overhaul led by new chief executive officer Nuno Matos.
On Monday, the Australian Securities and Investment Commission (ASIC) revealed that ANZ had admitted to a number of wrongdoings across its institutional and retail divisions, including "unconscionable conduct" for services provided to the Australian government, falsely reporting bond trading volumes by tens of billions of dollars and other misconduct across retail products and services over a number of years.
ANZ agreed to pay $240 million in penalties as a result, which ASIC chair Joe Longo noted was the largest penalty ASIC has ever brought against one entity.
"[It] reflects 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," Longo said. "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.
"Time and time again ANZ betrayed the trust of Australians," he added.
Federal courts will determine whether the fines are fair and appropriate. With this latest case, ASIC has brought 11 civil penalty proceedings against ANZ since 2016, racking up more than $310 million in fines.
In a statement, the bank said: "In relation to ANZ’s role as duration manager, ASIC has not alleged ANZ engaged in market manipulation or over-hedging. All trading undertaken by ANZ as duration manager was to hedge the risk borne by it in connection with that role on this transaction.
"It is ANZ’s view that no loss was caused to the Commonwealth from its trading as duration manager," the lender continued. "However, given ANZ could have executed its role as duration manager with better communication, ANZ has offered to pay the [Australian Office of Financial Management] the revenue it earned as duration manager as a goodwill gesture."
But 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.”
Matos, who joined ANZ’s executive team in May, plans to cut roughly 3,500 jobs from the bank’s 43,000-strong workforce by September 2026. The bank also intends to reduce its reliance on consultants and third-party vendors, affecting another 1,000 managed services contractors.
It's unclear how many brokers will be impacted by the changes. But a source told Australian Broker that the cuts are aimed more at reducing inefficiencies in ANZ's head office than targeting broker roles.
In addition to the fines, ANZ has established an "ASIC Matters Resolution Program" within its retail division. The purpose is to meet the regulator's requirements and offer improvements through centralized governance.
ANZ also plans to invest an additional $150 million to roll out a remediation program aimed at fixing weaknesses in its non-financial risk management. The plan is set to be submitted to the Australian Prudential Regulation Authority by 30 September. Furthermore, ANZ has hired consultancy firm Promontory to independently monitor the implementation of the remediation plan.
“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.”
