ANZ savaged by regulator over bond trading data reporting and retail failings

The Asutralian Securities and Investment Commission (Asic) accuses the Austrlaian lender of "acting unconscionably" in its dealings with the Australian Government whilst managing a $14 billion bond deal and incorrectly reported its bond trading data to the Australian Government by overstating the volumes by tens of billions of dollars over almost two years,

In the retail market, ANZ is chided for failing to respond to hundreds of customer hardship notices, and for making false and misleading statements about its savings interest rates and failing to pay the promised interest rate to tens of thousands of customers. It is also reprimanded for failing to refund fees charged to thousands of dead customers and not responding to loved ones trying to deal with deceased estates within the required timeframe.

The penalties subject to consideration and approval by the Federal Court include $125 million for the institutional and markets matters, including a record $80 million penalty for unconscionable conduct, and $115 million in total penalties for the three retail matters.

Asic Chair Joe Longo says: "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.

"There are fundamental issues with ANZ’s risk and compliance culture that require the Board’s and executives’ urgent attention."

Asic has now brought eleven civil penalty proceedings against ANZ since 2016 with proposed and ordered penalties totalling more than $310 million.

Asic deputy chair Sarah Court comments: "The issues we have seen reflect serious inadequacies across multiple levels and multiple divisions of ANZ and a clear failure to manage non-financial risk.

"As one of Australia’s biggest banks, customers trusted ANZ to do the right thing but, even on the basics like paying the correct interest rate, it fell short."

Responding, ANZ chairman Paul O’Sullivan says: "The reality is we 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.”