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Australian bank ANZ has been hit with a record A$240mn (US$160mn) penalty by the country’s corporate watchdog for a range of issues including its handling of a government bond sale and failing to refund fees charged against the accounts of deceased customers.
The Australian Securities and Investments Commission said on Monday that the total penalty was the largest announced by the regulator against one entity and reflected the seriousness of ANZ’s actions and its repeated failure to rectify those issues.
“Time and time again ANZ betrayed the trust of Australians,” said Joe Longo, chair of Asic.
The bank has agreed to pay the penalty in the latest move by Nuno Matos, the ex-HSBC executive who took over as ANZ chief executive this year, to get to grips with the bank’s issues.
Matos said the Asic agreement was proof as to why an overhaul of the bank was needed. “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,” he said in a statement.
ANZ, Australia’s fourth-largest bank by market capitalisation, was under multiple investigations last year, including over allegations that its traders had rigged a government bond sale. The bank’s culture was also brought into focus after it fired a number of traders following allegations of bad behaviour.
The total fine includes an A$80mn penalty over its actions related to the A$14bn bond sale. ANZ traders were accused of selling a large block of futures around the time of pricing, rather than gradually throughout the day, which put downward pressure on pricing. The bank was accused of misleading the government over the issue for two years.
That penalty was part of a broader A$125mn fine related to its bond activities after it was also found to have overstated its bond trading data in submissions to the government by tens of billions of dollars.
A separate A$115mn fine related to issues in its retail operations. They include not paying the correct interest rate to tens of thousands of customers, failing to respond to hardship notices and not responding to requests from the families of deceased ANZ customers in the required timeframe, said Asic.
“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,” said Longo.
“There are fundamental issues with ANZ’s risk and compliance culture that require the board’s and executives’ urgent attention.”
Matos said last week he planned to cut 3,500 roles and 1,000 third-party suppliers to shake up the bank.
The move came after some senior bankers were mistakenly sent an email to return their computers before they were told they were being let go.
