Fines imposed on Australia and New Zealand Banking Group (ANZ) for widespread misconduct and systemic risk failures affecting the Australian Government and at least 65,000 retail customers have been increased by A$10 million to A$250 million ($US165 million).
The Australian Securities and Investments Commission (ASIC) said these were the largest combined penalties it had secured against a single entity.
In doing so the Federal Court increased the penalty for ANZ’s inaccurate reporting of secondary bond market turnover data by $10 million to $50 million.
Justice Jonathan Beach ordered ANZ to pay:
- $135 million for institutional and markets misconduct relating to the management of a $14 billion government bond deal and inaccurate reporting of secondary bond market turnover data to the Australian Government
- $40 million for failing to respond to hundreds of customer hardship notices, sometimes for more than two years, and failing to have proper hardship processes
- $40 million for making false and misleading statements about savings interest rates, and failing to pay the promised rate to tens of thousands of customers, and
- $35 million for 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.
ASIC Chair Joe Longo stated that ANZ exposed the Government to a significant risk of harm, denied it the opportunity to protect itself and the public interest, and misled it for nearly two years by overstating bond trading volumes by billions of dollars.
“The size of the penalties ordered today underscores the seriousness of ANZ’s misconduct and its far-reaching consequences for the Government, taxpayers and tens of thousands of customers,” Longo said in a media release.
ASIC Deputy Chair Sarah Court said tens of thousands of customers suffered from systemic failures across ANZ’s retail bank, which extended to fundamental services like paying the correct interest rate on savings accounts.
“ANZ will also pay for misconduct that made an already difficult time far harder for hundreds of its customers who were experiencing hardship or dealing with the loss of a loved one,” Court said in the release.
In a news release, ANZ said the impact of the penalties and ASIC’s costs were almost wholly covered by existing provisions, including a $240 million penalty provision.
The bank said it was focused on significantly improving its management of non-financial risks, and it had established a program to meet commitments to ASIC to deliver improvements in its retail division.
Shares in ANZ (ASX: ANZ) closed on Friday down one cent at $36.03, capitalising Australia’s fourth largest bank at $107.58 billion
