ANZ Bank is set to pay $240 million in penalties, the largest fine levied by the Australian Securities and Investments Commission (ASIC) to date, as part of a settlement concerning four investigations into significant misconduct that jeopardized public funds and impacted thousands of customers.
The bank has acknowledged its engagement in unconscionable conduct while raising funds for the federal government to finance essential services such as health, welfare, education, infrastructure, and defense. ASIC highlighted multiple failures by ANZ, including neglecting to respond to hundreds of customer hardship notices and issuing misleading statements regarding savings interest rates. Additionally, ANZ failed to refund fees charged to numerous deceased customers.
According to ASIC, this misconduct occurred over several years and demonstrated ANZ’s “significant failure to manage non-financial risks across the bank.” The chair of ASIC, Joe Longo, emphasized on Monday that ANZ had repeatedly betrayed the trust of Australians, affecting nearly 65,000 customers. He remarked, “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 called attention to the urgent need for the bank’s board and executives to address fundamental issues related to ANZ’s risk and compliance culture.
As part of the settlement, which is pending approval by the federal court, the penalties include $125 million directed towards institutional and market matters—which features a record $80 million for the unconscionable conduct—and $115 million for three retail-related issues.
ASIC’s inquiry led to four specific allegations against the bank:
1. Acting unconscionably in its dealings with the Australian government during a $14 billion bond deal, including inaccurate reporting of bond trading data and overstating volume figures by tens of billions of dollars for nearly two years.
2. Failing to address 488 customer hardship notices from May 2022 to September 2024, with delays exceeding two years in some instances.
3. Issuing false and misleading statements about savings interest rates, resulting in tens of thousands of customers missing out on promised rates.
4. Neglecting to refund fees charged to thousands of deceased customers, with the bank’s systems inadequately identifying which fees should have been waived or refunded, exacerbating challenges for families dealing with the loss of a loved one.
ANZ’s chair, Paul O’Sullivan, extended an apology to affected customers, assuring them that the bank had taken necessary actions, including holding relevant executives accountable. He admitted, “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.”
The bank was contracted by the government to facilitate a $14 billion bond issue on April 19, 2023. The government routinely sells bonds to investors to generate funds, offering regular interest payments and a return of capital. However, ASIC alleged that ANZ’s actions prompted downward pressure on bond prices, placing the government at significant risk. When questioned about the situation later, ANZ’s reports were described as misleading or deceptive by the regulator.
These revelations echo issues previously identified in the banking sector during the royal commission over seven years ago, highlighting ongoing systemic problems.
