ANZ to Pay Record $240 Million Fine After Bond and Retail Banking Misconduct

ANZ will hand over $240 million (US$160 million) in penalties after admitting to a string of misconduct cases that span its institutional and retail banking divisions.

The settlement with the Australian Securities and Investments Commission (ASIC) marks the largest fine imposed on a single company in the regulator’s history.

ASIC’s four cases against ANZ ranged from misreporting bond trading data to failing vulnerable customers, misleading statements about savings interest, and charging fees to deceased customers.

“There are fundamental issues with ANZ’s risk and compliance culture that require the board’s and executives’ urgent attention,” ASIC Chair Joe Longo said.

The penalties will now go before the Federal Court for approval.

Longo said the case underscored why banks must ensure they put customers first.

“When trust is broken in this way, it is not just numbers on a balance sheet—it affects families, households and the credibility of our financial system.”

Rigged Bond Data Betrays Trust

The most serious matter concerned ANZ’s role as duration manager in a $14 billion Treasury bond issuance in April 2023.

ASIC found the bank overstated secondary trading volumes by tens of billions of dollars over almost two years, providing inaccurate data to the Australian Office of Financial Management (AOFM).

The court is expected to impose $85 million in penalties for the bond deal and a further $40 million for submitting false turnover data and making misleading annual attestations. ANZ has agreed to pay $125 million overall, including an $80 million penalty for unconscionable conduct.

“In the bond trading case, ANZ was in a trusted position and its conduct had the potential to reduce the amount of funding available to the government,” Longo said.

Customers Misled and Abandoned

ASIC also highlighted ANZ’s treatment of retail customers. Tens of thousands were short-changed after the bank advertised higher savings rates but failed to pay the promised returns.

The court is expected to impose $40 million for the misleading conduct.

Another $40 million will be levied for failing to respond to hardship applications.

In some cases, struggling customers waited more than two years without help.

ASIC said ANZ had no proper processes in place to handle hardship notices, despite obligations under the National Credit Code.

In a further blow, the regulator said ANZ charged fees to thousands of deceased customers and failed to deal with families managing estates in the required timeframe. That breach will attract a $35 million penalty.

Together, the retail banking cases carry fines of $115 million.

Bank Issues Apology, Pledges Reform

ANZ has acknowledged the seriousness of the breaches but said no financial loss was caused to the Commonwealth in its bond trading role.

The bank has committed to returning the revenue it earned from the Treasury bond transaction as a goodwill gesture.

“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. On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable,” Chairman Paul O’Sullivan said.

Chief Executive Nuno Matos admitted the failings were unacceptable.

“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,” he said.

To satisfy regulators, ANZ will file a Root Cause Remediation Plan with Australian Prudential Regulation Authority by Sept. 30. The plan is expected to cost about $150 million to implement in FY26, funded by shelving other projects.

The fine comes a week after it announced 3,500 job cuts as part of a major restructure aimed at cutting duplication and reducing reliance on consultants, while sparing most frontline roles.

ANZ’s Troubles Elsewhere

As ANZ grapples with record penalties in Australia, its troubles extend across the Tasman.

On Sept. 8, the bank’s New Zealand arm agreed to pay a $3.25 million penalty after admitting to breaching fair dealing laws twice.

The case centred on the bank wrongly charging nearly 210,000 customers fees and interest on “unarranged overdrafts,” totalling $4.37 million between December 2012 and May 2023.