ANZ Admits to Widespread Misconduct, Faces $156 Million in Penalties

Key Takeaways

• Record Penalty: ANZ faces $156 million (AUD 240 million) in proposed penalties, the largest set of penalties ASIC has ever announced against a single entity.
• Government Bond Deal Misconduct: ANZ admitted to unconscionable conduct in a $14 billion bond deal, overstating trading volumes by tens of billions and potentially leaving the government $17 million (AUD 26 million) worse off.
• Customer Harm: The bank failed to respond to hundreds of financial hardship notices, underpaid interest to tens of thousands of customers, and charged fees to thousands of deceased customers.
• Regulatory Rebuke: ASIC Chair Joe Longo said ANZ “betrayed the trust of Australians” and flagged deep issues in its risk and compliance culture.
• Repeat Offender: Since 2016, ASIC has launched 11 civil cases against ANZ, with combined penalties now exceeding $200 million (AUD 310 million).

Deep Dive

Australia and New Zealand Banking Group Limited (ANZ) has admitted to years of widespread misconduct, including unconscionable conduct in dealings with the Australian Government, mishandling customer hardship cases, misleading interest rate promises, and charging fees to deceased customers. The bank now faces proposed penalties of $156 million (AUD 240 million), subject to approval by the Federal Court.

If approved, this will mark the largest set of penalties ever imposed by the Australian Securities and Investments Commission (ASIC) against a single entity.

Four Cases of Misconduct

ASIC filed four separate proceedings covering both ANZ’s institutional and retail operations.

• Government Bond Deal Misconduct: ANZ admitted to acting unconscionably while managing a $9.1 billion (AUD 14 billion) bond deal, overstating trading volumes to the Australian Government by tens of billions of dollars for nearly two years. ASIC estimates the government may have been $17 million (AUD 26 million) worse off due to ANZ’s trading. The bank agreed to pay $81 million (AUD 125 million) in penalties, including a record $52 million (AUD 80 million) penalty for unconscionable conduct.
• Financial Hardship Failures: Between May 2022 and September 2024, ANZ failed to respond to 488 customer hardship notices, some delayed for more than two years. In some cases, the bank pursued debt recovery while ignoring hardship requests.
• Misleading Interest Rates: For over a decade, ANZ promoted introductory bonus interest offers that were not properly applied. This led to underpayments to tens of thousands of customers, with around $312,000 (AUD 480,000) in interest not paid.
• Deceased Estates: From 2019 to 2023, ANZ charged fees to thousands of deceased customers and failed to address estates in the required timeframe. Over 18,900 accounts were remediated, with $2.5 million (AUD 3.8 million) refunded.

In total, the three retail misconduct cases will bring $75 million (AUD 115 million) in penalties.

“Time and time again ANZ betrayed the trust of Australians,” ASIC Chair Joe Longo said. “There are fundamental issues with ANZ’s risk and compliance culture that require the Board’s and executives’ urgent attention. When public funds are put at risk, every Australian pays the price.”

Deputy Chair Sarah Court emphasized the scale of the misconduct, adding, “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. If these penalties are imposed by the court, it will be a clear message to ANZ and all other banks that the cost of breaking the law is not an acceptable cost of doing business.”

A Pattern of Failures

The penalties add to a long history of ANZ’s regulatory breaches. Since 2016, ASIC has launched 11 civil penalty proceedings against the bank, with proposed and ordered penalties now exceeding $200 million (AUD 310 million).

Past cases include breaches of responsible lending laws, misleading disclosures, and attempted manipulation of benchmark interest rates.

The Federal Court will now decide whether the proposed penalties are appropriate. While ANZ has admitted the allegations in each proceeding, it has not conceded that the government suffered financial loss from the bond deal, despite ASIC’s position that taxpayers were shortchanged.

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