ANZ bank pays record $240m fine for widespread misconduct: ‘Betrayed the trust of Australians’
Company admits allegations in four investigations brought by financial regulator Asic
ANZ bank will pay $240m in penalties, the biggest fine issued by the financial regulator Asic to date, to settle four investigations into widespread misconduct that put public funds at risk, and affected tens of thousands of customers.
The bank has admitted to engaging in unconscionable conduct when raising money for the federal government to finance spending in critical areas such as health, welfare, education, infrastructure and defence.
In addition, the regulator said ANZ failed to respond to hundreds of customer hardship notices, made misleading statements about its savings interest rates, and failed to refund fees charged to thousands of dead customers.
Asic said the misconduct had occurred over many years and had been marked by ANZ’s “significant failure to manage non-financial risks across the bank”.
The Asic chair, Joe Longo, said on Monday that “time and time again ANZ betrayed the trust of Australians”, with the misconduct affecting nearly 65,000 customers.
“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,” Longo said.
“There are fundamental issues with ANZ’s risk and compliance culture that require the board’s and executives’ urgent attention.”
ANZ has admitted to the allegations, while noting that it does not believe it caused any losses for the commonwealth.
The penalties are subject to approval by the federal court and include $125m for the institutional and markets matters (including a record $80m penalty for unconscionable conduct) and $115m in total penalties for the three retail matters.
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Asic filed four proceedings:
Acting unconscionably in the bank’s dealings with the Australian government while managing a $14bn bond deal, including incorrectly reporting its bond trading data and overstating the volumes by tens of billions of dollars for nearly two years.
Failing to respond to hundreds of customer hardship notices, in some cases for more than two years.
Making false and misleading statements about savings interest rates and failing to pay the promised rates to tens of thousands of customers.
Failing to refund fees charged to thousands of dead customers and not responding to families dealing with deceased estates within required timelines.
The ANZ’ chair, Paul O’Sullivan, issued an apology to customers and assured them the company had taken “the necessary action, including holding relevant executives accountable”.
“While we have worked hard to get regularity certainty on these matters, the reality is we made mistakes that have had a significant impact on customers,” he said.
“On behalf of ANZ, I apologise.”
‘Widespread misconduct’
ANZ was engaged by the government to deliver a $14bn bond issue on 19 April 2023.
Governments regularly sell bonds to investors to raise money. In return, investors receive regular interest payments and eventually get their capital back.
Asic alleged the bank sold a significant volume of bond futures at a time that put downward pressure on its price, exposing the government to “significant risk of harm”.
“When the government later asked what happened, ANZ’s reports were misleading or deceptive,” Asic said.
Separately, the regulator said ANZ failed to respond to 488 customers who submitted financial hardship notices between May 2022 and September 2024.
The regulator said that in some cases ANZ took action to recover debts from customers even when they had not responded to the customers’ hardship notices, including issuing default notices and engaging external debt collection agencies.
ANZ also failed to refund fees charged to thousands of deceased customers because its systems and processes could not identify which fees should be waived or refunded, according to the allegations.
The regulator said the issue likely “compounded the difficulties faced by loved ones dealing with the death of a family member or relative”.
Similar issues were uncovered across the sector at the royal commission more than seven years ago.
Asic also alleged that thousands of customers missed out on bonus interest payments owed on various savings accounts.