Sunita Somvanshi
ANZ has agreed to a $240 million penalty after admitting to the allegations in both its institutional and retail banking operations. The Australian Securities and Investments Commission (ASIC) filed four proceedings against the bank, requiring Federal Court approval.
ASIC proposes a $125 million penalty for institutional and markets issues, including a record $80 million for unconscionable conduct related to a $14 billion government bond transaction.
The bank admitted to providing incorrect bond trading data to Australian authorities, overstating volumes by tens of billions of dollars over almost two years.
“In the bond trading case, ANZ was in a trusted position and its conduct had the potential to reduce the amount of funding available to the government,” ASIC Chair Joe Longo said in the announcement. “When public funds are put at risk, every Australian pays the price.”
ASIC’s position is that ANZ’s misconduct potentially made the government $26 million worse off. “The critical issue here is that ANZ sold a significant volume of 10-year Australian bond futures around the time of pricing, which placed undue downward price pressure on the bond price,” Longo explained during the press conference.
While ANZ has not conceded that the Commonwealth suffered any loss, Longo described the bank’s conduct as “clearly grubby” and noted that “they said they were going to be frank in their communication to AOFM; they weren’t. They said they were going to follow their own policy and procedures; they didn’t.”
On the retail side, ANZ faces a $115 million penalty for three separate failures affecting nearly 65,000 customers:
ASIC alleges ANZ failed to respond to 488 hardship notices received between May 2022 and September 2024; in some cases responses took more than two years and debt collection action was taken despite unresolved hardship notices.
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“Whether it was a customer facing unemployment, recovering from serious illness, grieving the loss of a loved one or escaping family violence, ANZ left these people without the help that they were asking for,” said ASIC Deputy Chair Sarah Court. “In some cases, the bank pursued debt recovery even before acknowledging these hardship pleas.”
Customers who opened savings accounts received less than promised. The bank made false statements about interest rates and failed to pay the correct amounts to tens of thousands of account holders. The issue impacted 56,703 customers with 26,917 receiving less than the promised interest, totaling about $480,000 in underpayments.
ANZ also charged fees to thousands of deceased customers and missed deadlines for responding to estate inquiries. The bank has previously remediated over 18,900 accounts, refunding approximately $3.8 million. Court noted that “these failures by ANZ likely made a difficult time even tougher, and compounded the distress these families were facing.”
Including this announcement (which requires Federal Court approval), ASIC says total proposed and ordered penalties against ANZ since 2016 now exceed $310 million, across eleven civil penalty proceedings.
“Time and time again ANZ betrayed the trust of Australians,” Longo stated. “There are fundamental issues with ANZ’s risk and compliance culture that require the Board’s and executives’ urgent attention.”
“It’s now more than five years since the Banking Royal Commission, but disappointingly here we are yet again, with not one but four more examples of how ANZ has fallen short,” Court added. “If these penalties are imposed by the court, it should be a clear message to ANZ and all other banks that the cost of breaking the law is not an acceptable cost of doing business.”
Each of the four proceedings will be considered separately by the Federal Court. ANZ has admitted to all allegations in the filings.
The proceedings include the $125 million institutional markets penalty (with the $80 million component for unconscionable conduct) and $115 million for the three retail customer failures.
