“ANZ Betrayed the Trust of Australians”, Faces $161 Million Fine for Misconduct

The Australian financial services regulator has fined commercial bank ANZ AU$240 million (US$160.8 million) for major lapses in its institutional and retail divisions. Announced today (Monday), the regulator even labelled some lapses as “unconscionable conduct in services.”

A Massive Penalty on a Bank

The amount involved is by far the largest financial penalty sought by the Australian Securities and Investments Commission (ASIC).

“The total penalties… reflect the seriousness and number of breaches of law, the vulnerable position that ANZ put its customers in, and the repeated failures to rectify crucial issues,” said ASIC’s Chair, Joe Longo.

Discover how neo-banks become wealthtech in London at the FMLS25.

The regulatory action came for lapses and irregularities in four areas. The regulator also highlighted that the “misconduct” in the bank’s services occurred over many years.

ASIC detailed that the bank acted “unconscionably” in its dealings with the Australian government when managing a AU$14 billion (US$9.38 billion) bond deal. It incorrectly reported the bond trading by overstating the volumes by tens of billions of dollars over almost two years.

Read more: ASIC Admits Its Own Rules Were Too Complex, Deletes 9,000 Pages of Red Tape

The lapses around retail offerings include failure to respond to hundreds of customer hardship notices. The bank did not even have a proper hardship process in place.

Other retail division failures include making false and misleading statements about savings interest dates, failing to pay the promised interest rates to thousands of customers, failing to refund fees charged to thousands of deceased customers, and not responding to those trying to deal with deceased estates within the required timeframe.

According to ASIC, the bank’s misconduct affected nearly 65,000 customers.

Of the total penalty figure, AU$125 million (US$83.75 million) was imposed for institutional and market matters, including the record AU$80 million (US$53.6 million) unconscionable conduct. AU$40 million (US$26.8 million) was imposed for inaccurate interest rates, another AU$40 million (US$26.8 million) for ignoring customers’ hardships, and AU$35 million (US$23.45 million) for breaches concerning deceased estates.

Although the bank admitted to every allegation and agreed to pay the penalty, the amount now needs to be approved by an Australian court.

No “Market Manipulation” Allegations

ANZ’s statement on the penalty stressed that the bank did not face any market manipulation allegations or ever engage in hedging.

“While ASIC has not alleged that ANZ engaged in market manipulation, it’s clear we have not met the standards expected of us,” said ANZ’s Chairman, Paul O’Sullivan.

ASIC has imposed more than AU$310 million (US$207.7 million) in penalties on ANZ since 2016, including the recent ones.

“Time and time again, ANZ betrayed the trust of Australians,” Longo added.