ANZ hit with $1b capital charge, forced to undertake review
ANZ has been forced to undertake a widespread review into its entire organisation after the financial regulator flagged issues stemming from the bonds trading scandal “may be present in other parts of the bank”.
The Australian Prudential Regulation Authority on Thursday morning announced it had entered into a court-enforceable undertaking with ANZ, and demanded the bank hold $1 billion in capital until it cleans up its long-standing cultural problems.
Politicians criticised the changes, with the political pressure on the sector at a fever pitch as consumers buckle under the cost of living and the highest interest rates for a decade. Credit: Peter Rae
“APRA has seen how long-standing non-financial risk management weaknesses have manifested in material prudential issues at some of ANZ’s peer banks,” APRA chair John Lonsdale said.
“We have observed some similar weaknesses at ANZ and require these to be addressed as a priority.”
The regulator in August demanded that ANZ launch an independent review into the root causes of the governance issues in the markets unit and develop a remediation plan in response to the findings.
That review, which the ANZ board is preparing to release, identified root causes that have contributed to the “emergence and persistence of risk governance shortcomings” in the markets division, and may be present in other parts of the bank, APRA said.
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ANZ has been under increased scrutiny over a suite of corporate governance issues, including the bank’s role in a $14 billion government bond sale in April 2023, which is being investigated by the corporate regulator.
Separately, the bank admitted its markets unit inflated its bond trading figures to the federal government, which was the subject of the review demanded by APRA, and a workplace complaints investigation found traders in the Sydney dealing room were inebriated during working hours.
