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Australia and New Zealand Banking Group has admitted to widespread misconduct affecting nearly 65,000 customers and agreed to pay $240 million in penalties, the largest regulatory settlement in Australian Securities and Investments Commission history.
The bank's chairman and chief executive issued public apologies Monday as ANZ acknowledged unconscionable conduct in a $14 billion government bond deal, failures to respond to customer hardship notices, false statements about savings rates, and charging fees to deceased customers.
"While we have worked hard to get regulatory certainty on these matters, the reality is we made mistakes that have had a significant impact on customers," ANZ Chairman Paul O'Sullivan said. "On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable."
The settlement requires Federal Court approval and represents the culmination of five separate ASIC investigations spanning ANZ's institutional markets and retail banking divisions.
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Executive Accountability Measures
ANZ Chief Executive Nuno Matos acknowledged the bank's failures fell short of customer expectations and reinforced the need for substantial changes.
"The failings outlined are simply not good enough and they reinforce the case for change," Matos said. "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."
The bank completed more than 50 accountability reviews targeting current and former executives, resulting in significant remuneration reductions. Additional accountability measures will be implemented through this year's executive compensation review process, according to O'Sullivan.
Penalty Breakdown
The $240 million settlement divides across five distinct violations:
$85 million for ANZ's role as duration manager in the 2023 Treasury bond issuance
$40 million for submitting inaccurate monthly bond turnover data over nearly two years
$40 million for failing to pay bonus interest on Online Saver accounts and displaying incorrect rates
$40 million for breaching customer hardship notice obligations
$35 million for violations concerning deceased estate handling
Government Bond Trading Violations
The largest penalty addresses ANZ's conduct as duration manager for the Australian Office of Financial Management's $14 billion 10-year Treasury bond issuance on April 19, 2023.
ASIC alleged ANZ sold significant bond futures volumes around pricing time, creating downward price pressure while failing to disclose substantial remaining positions to the government client.
"While ASIC has not alleged that ANZ engaged in market manipulation, it's clear we have not met the standards expected of us," O'Sullivan said. "We have apologised to the AOFM for the inadequate communication on this transaction."
ANZ maintains no loss was caused to the Commonwealth from its trading activities, noting all trades were conducted to hedge risk associated with its duration manager role. As a goodwill gesture, the bank offered to pay AOFM the revenue it earned in that capacity.
The settlement also addresses ANZ's submission of inaccurate monthly secondary bond turnover data to AOFM over almost two years, with inflated figures making the bank appear more active than competitors in government bond markets.
Customer Impact Assessment
The retail banking violations affected thousands of vulnerable customers across multiple product lines and service areas.
Between May 2022 and September 2024, ANZ failed to respond to 488 customer hardship notices, with some cases unresolved for over two years despite customers reporting unemployment, medical issues, bereavement and family violence.
"Unfortunately, some of our failings occurred when our customers were at their most vulnerable," Matos said. "For this we are deeply sorry, and we are making changes to better support our customers when they need us most."
The bank took debt collection actions against customers whose hardship notices remained unanswered, including default notices and external agency referrals.
Interest Rate and Fee Violations
ANZ's system deficiencies prevented proper application of bonus interest rates on certain accounts between July 2013 and January 2024, requiring remediation of 194,487 accounts representing 7.26 percent of new accounts opened during that period.
A separate issue between August 2024 and March 2025 affected 56,703 customers, with ANZ failing to pay correct interest amounts to 26,917 customers, resulting in approximately $480,000 in unpaid interest.
The deceased estate violations occurred between July 2019 and June 2023, when ANZ's systems failed to identify appropriate fee waivers and refunds after customer deaths. The bank cannot identify the total number of affected customers, leaving the full impact unknown.
Regulatory Response
ASIC Chair Joe Longo emphasized the settlement's significance in establishing accountability standards for major financial institutions.
"Time and time again ANZ betrayed the trust of Australians," Longo said. "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."
ASIC Deputy Chair Sarah Court highlighted systemic inadequacies across multiple ANZ divisions and clear failures in non-financial risk management.
"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," Court said.
Compliance and Remediation Programs
ANZ established an ASIC Matters Resolution Program within its retail division to deliver improvements across breach reporting, event management, customer remediation and complaints handling.
The bank appointed Promontory as an independent expert to review program adequacy and assess whether ANZ delivers its regulatory commitments.
ANZ will submit its Root Cause Remediation Plan to the Australian Prudential Regulation Authority by September 30, as required under a court enforceable undertaking. The bank expects to spend approximately $150 million implementing the plan in fiscal year 2026.
The remediation plan follows an enterprise-wide independent review identifying persistent weaknesses in non-financial risk management across culture, capabilities, accountability, governance, policies and execution.
Historical Pattern
Including Monday's announcement, ASIC has brought 11 civil penalty proceedings against ANZ since 2016, with total penalties exceeding $310 million.
Previous violations include $25 million for failing to provide promised customer benefits over 20 years, $15 million for misleading credit card customers about available funds, and $10 million for attempting to manipulate bank bill swap reference rates.
Market Implications
The record settlement reinforces regulatory expectations that major banks maintain robust compliance frameworks and prioritize customer welfare in their operations.
The penalties reflect ASIC's intensified enforcement approach following Banking Royal Commission recommendations, particularly targeting systemic failures affecting vulnerable customers.
Each matter requires separate Federal Court consideration for penalty approval and additional orders. The court must determine whether proposed penalties appropriately reflect the scope and seriousness of ANZ's admitted misconduct across institutional and retail banking operations.
The settlement establishes new benchmarks for regulatory accountability in Australia's banking sector, emphasizing the unacceptable cost of compliance failures that undermine public trust in financial institutions.
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