The big “reveal” from Matos won’t be delivered until October but, on Monday, Matos and ANZ chairman Paul O’Sullivan promised this would be a systemic overhaul.
So this embarrassing litany of misconduct might play well for the new chief executive’s argument that there is urgency to the bank’s overhaul, but what does it say about the board that missed all these IEDs that publicly detonated on Monday?
ASIC detailed a case where a widow with dementia was unable to pay for her husband’s funeral after ANZ took too long to release the funds from his account.
Speaking to investors on Monday, O’Sullivan used the word “transformation” 13 times in his short prepared remarks; during his question-and-answer session, I had to stop counting.
(And it compares to the five times Longo called ANZ’s behaviour “grubby”.)
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The ASIC settlement provided Matos with a platform to argue the need for change, including improving the technology systems and processes that led to the bank ghosting hundreds of hardship customers, and in some cases suing these desperate customers or referring them to debt collectors.
Longo says ANZ’s underinvestment in technology and processes was also the culprit that led to the bank failing to refund fees charged to thousands of dead customers and not responding to loved ones trying to deal with deceased estates.
ASIC detailed a case where a widow with dementia was unable to pay for her husband’s funeral after ANZ took too long to release the funds from his account.
At the risk of sounding tabloid, significant real life pain and emotional distress can be caused by what sounds like the benign sin of poor processes or inadequate systems – all of which comes under the banner of “non-financial risk”.
The largest element of the fine came from ANZ’s dealings with the government on managing a $14 billion bond issuance for which the regulator accused the bank of acting unconscionably and misleading the government. It also admitted to failing to meet its obligations as an Australian financial services licensee and has agreed to pay a combined penalty of $125 million.
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But O’Sullivan defiantly maintained that ANZ did not engage in market manipulation and that its action did not cost the government any money.
“Importantly, ASIC has agreed that the data misreporting was not intentional. In summary, on both of these issues, while the bank did not act with bad intent on either the trading or data reporting matters, it’s clear we did make serious mistakes and, I would add, importantly, our own requirements and processes were not complied with,” O’Sullivan said.
But Longo had the last word, telling the media that ASIC believed that ANZ’s bond trading action cost the government $26 million, adding: “I hasten to say that an $80 million penalty says a lot, doesn’t it?”
