ANZ agrees to pay $240M in penalties for widespread misconduct
Australia and New Zealand Banking Group Limited (ANZ) has admitted to engaging in unconscionable conduct in services it provided to the Australian Government, incorrectly reporting its bond trading data to the Australian Government by overstating the volumes by tens of billions of dollars and to widespread misconduct across products and services impacting nearly 65,000 customers.
The Australian Securities and Investments Commission (ASIC) and ANZ will ask the Federal Court to impose penalties of $240 million in relation to four separate proceedings spanning misconduct across ANZ’s Institutional and Retail divisions.
The misconduct occurred over many years and was marked by ANZ’s significant failure to manage non-financial risk across the bank.
The four matters ASIC has filed against ANZ concern:
- Acting unconscionably in its dealings with the Australian Government whilst managing a $14 billion bond deal and incorrectly reported its bond trading data to the Australian Government by overstating the volumes by tens of billions of dollars over almost two years,
- 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.
The penalties subject to consideration and approval by the Federal Court include $125 million for the institutional and markets matters, including a record $80 million penalty for unconscionable conduct, and $115 million in total penalties for the three retail matters.
ANZ has admitted the allegations in each of the proceedings.
It is a matter for the Court to determine whether the penalties are appropriate and to make other orders.
Each matter will now be separately considered and determined by the Federal Court.
