ANZ Banking Group, ANZ New Zealand's Australian parent, faces fines of A$240 million after admitting to "unconscionable conduct" in bond dealing services it undertook for the Australian government and "widespread misconduct" across products and services affecting nearly 65,000 Australian customers.
In what the AFR has called the biggest scandal in the ANZ Group's 182-year history, ANZ and ASIC, the Australian securities and financial conduct regulator, will ask the Federal Court to impose penalties of A$240 million in relation to four separate proceedings spanning misconduct across ANZ’s Institutional and Retail divisions between 2013 to 2023.
The bond dealing issue concerns a A$14 billion issuance on 19 April, 2023, in which ANZ was assisting the Australian Government’s sovereign debt management agency, the Australian Office of Financial Management (AOFM).
ASIC says that, instead of trading gradually throughout the day to limit market impact, ANZ sold a significant volume of 10-year Australian bond futures around the time of pricing. placing undue downward price pressure on the bond price.
"ANZ knew its trading could expose its client to significant risk of harm, but did not disclose to its client that ANZ still had significant volumes to sell before pricing nor provide its client an opportunity to consult with ANZ about delaying pricing," ASIC's media release says.
"When the Government later asked what happened, ANZ’s reports were misleading or deceptive."
The bank also admitted three customer-related issues "across multiple levels and multiple divisions of ANZ" in what ASIC Deputy Chair Sarah Court calls "a clear failure to manage non-financial risk."
- Failing to respond to hundreds of customer hardship notices, in some cases for over two years, and failing to have proper hardship processes in place,
- Making false and misleading statements about its savings interest rates and failing to pay the promised interest rate to tens of thousands of customers, and
- Failing to refund fees charged to thousands of dead customers and not responding to loved ones trying to deal with deceased estates within the required timeframe.
Better management of non-financial risk was prominent among the aims stated last week by new ANZ Banking Group CEO Nuno Matos as he announced plans to shed around 3,500 Australian staff and up to 1,000 contractors - a move the bank says will result in a A$560 million restructuring charge.
ANZ's departed CEO, Shayne Elliott, said in August last year the bank itself had found no evidence of misconduct or market manipulation by ANZ in connection with the bond issues, nor any evidence that misconduct during a 2023 government bond issuance had cost Australian taxpayers
He also said whilst some information provided to AOFM (the Australian Office of Financial Management) may have been incorrect, this was a mistake, rather than a deliberate act.
The ASIC release also details seven other matters of prior misconduct between 2017 and 2023.
ASIC Chair Joe Longo says the penalties sought are the largest announced by ASIC against one entity.
"Time and time again ANZ betrayed the trust of Australians."
9 Comments
ASIC Chair Joe Longo says the penalties sought are the largest announced by ASIC against one entity.
Anyone with any hint of touching this will be in the 3,500 walking the plank.
ANZ's departed CEO, Shayne Elliott, said in August last year the bank itself had found no evidence of misconduct or market manipulation by ANZ in connection with the bond issues, nor any evidence that misconduct during a 2023 government bond issuance had cost Australian taxpayers
In reality it's probably 3,501 in total, the CEO just went earlier.
I believe that ANZ is the biggest KiwiSaver provider in NZ, its also is one of NZs biggest employers, but does not make employer contributions, instead offering total remuneration packages? (Maybe not for union members, would love to know) .
In line with the recent APRA finding, it seems that ANZ treat staff much like customers.
Really? They don't make KS contributions? Can anyone confirm that?
Also, is that for all staff or just those below certain levels?
I'm thinking they make contributions but it is included in your employment contract $'s so you receive your contractual $'s less KS when you are paid, and they are not alone doing it this way.
Oh, I get it. Why do they do it like that? To make base pay seem higher?
Many companies do it.
Why do they do it? To save money. Especially if governments tweak the %'s, it doesn't come out of their end.
Why do they say they do it? To ensure pay is fair regardless of whether you signed up for Kiwisaver.
so BAU then
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.