ANZ is facing the largest set of penalties ever imposed by the ASIC after the regulator accused the lender of serious misconduct in both its institutional and retail operations.
According to Finextra, the case centres on two areas of wrongdoing. In the institutional and markets division, Asic alleges that ANZ acted “unconscionably” in its dealings with the Australian Government during the management of a $14bn bond issue. The bank is also accused of overstating its bond trading volumes by tens of billions of dollars over a period of nearly two years.
In the retail market, the lender was found to have ignored hundreds of hardship notices from customers, misled savers about interest rates, and failed to pay promised rates to tens of thousands of customers. It also charged fees to deceased customers and did not deal with bereaved families within the required timeframes.
The penalties under consideration by the Federal Court amount to $125m for the institutional and markets issues, including a record $80m fine for unconscionable conduct, and $115m for three retail-related breaches. Together, the proposed sanctions reach $240m, the highest ever announced by Asic against a single entity.
Asic chair Joe Longo said, “Time and time again ANZ betrayed the trust of Australians. The total penalties across these matters are the largest announced by Asic against one entity and 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. There are fundamental issues with ANZ’s risk and compliance culture that require the Board’s and executives’ urgent attention.”
The regulator highlighted that since 2016 it has initiated 11 civil penalty proceedings against ANZ, with proposed and ordered penalties now exceeding $310m.
Asic deputy chair Sarah Court added, “The issues we have seen reflect serious inadequacies across multiple levels and multiple divisions of ANZ and a clear failure to manage non-financial risk. As one of Australia’s biggest banks, customers trusted ANZ to do the right thing but, even on the basics like paying the correct interest rate, it fell short.”
In response, ANZ chairman Paul O’Sullivan issued an apology, acknowledging the scale of the bank’s failings. He said, “The reality is we 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.”
The case underscores the regulator’s determination to crack down on systemic failings in the country’s largest banks, signalling ongoing scrutiny of compliance culture across the financial sector.
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