By Michael Janda, ABC
The bank is also currently remediating 30,000 customers who were underpaid interest. Photo: RNZ / Cole Eastham-Farrelly
ANZ bank faces a record $240 million penalty for engaging in "unconscionable conduct" in some of its bond trading for the federal government, as well as "widespread misconduct" affecting nearly 65,000 retail customers.
The bank has agreed to the penalty with the Australian Securities and Investments Commission (ASIC), although it will require Federal Court approval.
ASIC said the settlement included $125 million for matters related to Australian government bond trading, where the bank misreported trading data and acted "unconscionably" while managing a $14 billion bond deal, which ASIC said had the potential to reduce the amount of funding available to the government.
ASIC said that ANZ sold a large chunk of 10-year bond futures around the time the bond issue was priced, which placed downward pressure on bond prices and could have resulted in a shortfall in the bond sale.
ASIC said that, when the government later asked what had happened, the bank's answers were misleading or deceptive.
ANZ said that ASIC had not alleged it engaged in market manipulation or over-hedging.
The bank said all trading undertaken by ANZ as duration manager was to hedge the risk borne by it in connection with its role on this transaction.
ANZ claims that no loss was caused to the Commonwealth from its trading as duration manager.
ANZ is also alleged to have overstated its bond trading turnover for nearly two years, which may have resulted in it winning more appointments as the lead for future bond issues.
"We have apologised to the AOFM [Australian Office of Financial Management] for the inadequate communication on this transaction and offered to pay the AOFM the revenue ANZ earned as duration manager," ANZ chair Paul O'Sullivan said in a statement.
"The board has driven comprehensive accountability reviews in relation to the markets issues, which have resulted in significant reductions in remuneration for certain current and former executives."
Nearly 30,000 customers underpaid savings interest
The regulator said $115 million of the proposed penalty relates to customer failings.
ANZ failed to respond to 488 customer hardship notices, in some cases for more than two years.
ASIC said that the reasons for the hardship applications included unemployment, serious health issues, bereavement and family violence.
In some cases, ANZ undertook debt collection activities, including issuing default notices and bringing in external debt collection agencies, despite not having responded to the customer's hardship application.
Separately, ANZ made false and misleading statements about some of its savings rates, failing to pay the promised introductory bonus interest rate to tens of thousands of customers.
ANZ had already compensated nearly 200,000 customers affected by this between July 2013 and January 2024, however ANZ is now remediating another 29,917 customers who were underpaid interest for similar reasons between August 2024 and March 2025.
The bank also failed to refund fees to thousands of dead customers and was slow in responding to loved ones trying to manage deceased estates.
As with the incorrect savings rates, ASIC said this was due to inadequate systems and processes that could not identify which fees should be waived or refunded, not whether any fees had already been waived or refunded.
ASIC said ANZ had already been penalised seven times in the past eight years for prior misconduct.
ANZ bosses say sorry
ANZ chair Paul O'Sullivan acknowledged the bank had "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."
Last week, ANZ's new chief executive Nuno Matos, who has only been in the role for a matter of months, announced the bank would be cutting 3,500 staff and around 1,000 contractor positions over the next year.
"The failings outlined are simply not good enough and they reinforce the case for change," he said in a statement.
"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."
- ABC
