ANZ to pay $240m penalty for widespread misconduct
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More news: The Finance Sector Union (FSU) will lodge a dispute with the Fair Work Commission for not “properly consulting staff” after the bank was hit with a $240 million fine from ASIC and moves to cut 4,500 employees and contractors.
The FSU said is formally making the complaint after “it found ANZ’s response to consultation requirements under the enterprise agreement woeful”, according to a statement, as they called for “urgent intervention” to give workers clarity.
FSU national secretary Julia Angrisano said that “loyal staff are being thrown on the scrapheap without clarity or respect” amid a restructure that to many workers “feels like chaos”.
What they said: “ANZ can find $240 million to pay for unconscionable conduct, yet it’s cutting 3,500 staff. It shows a bank that is completely unhinged, workers and customers are the ones paying the price for executive failure,” Angrisano said.
“This record penalty makes clear ANZ’s leadership failed in its duty to customers, but instead of executives taking responsibility, it’s frontline staff whose jobs are being sacrificed.”
ANZ shares edge lower on $240m misconduct penalty
More news: ANZ’s share price edged 0.74% lower to $32.94 by 12:36pm AEST following the news that it would pay a record $240 million penalty for widespread misconduct.
Citi analysts expect the market to be positive on the bank’s efforts to restore the relationship with the regulators along with “further evidence” chief executive Nuno Matos is “quickly prosecuting change on efficiency and non-financial risk (which has been an overhang on the stock)”.
Citi has a ‘neutral’ rating on the stock with a target price of $32.50 and prefers ANZ over the other major banks.
What they said: “Coupled with the FTE announcements last week, we think that ANZ is effectively clearing the decks before a more optimistic and forward-looking agenda can be delivered at the October strategy day,” Citi said.
“...While the previous management team arguably played down incremental resources required to tackle non-financial risk issues, we think the additional cost sends the appropriate signal to the regulators that the issue is being taken seriously.”
ANZ to pay $240m penalty for widespread misconduct
The news: ANZ and the corporate regulator will ask the Federal Court to impose penalties of $240 million in relation to its bond trading scandal, customer hardship, false and misleading statements and fees charged to dead customers.
The context: The Australian Securities and Investments Commission (ASIC) has four separate proceedings spanning misconduct across ANZ’s institutional and retail divisions.
ASIC said the bank incorrectly reported its bond trading data to the Australian Government by overstating the volumes by tens of billions of dollars and to widespread misconduct across products and services impacting nearly 65,000 customers.
The four matters ASIC has filed against bank include:
- Acting unconscionably in its dealings with the Australian Government whilst managing a $14 billion bond deal and incorrectly reported its bond trading data to the Australian Government;
- Failing to respond to hundreds of customer hardship notices, in some cases for over two years, and failing to have proper hardship processes in place;
- Making false and misleading statements about its savings interest rates and failing to pay the promised interest rate to tens of thousands of customers; and
- 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.
The penalty includes $125 million for the institutional and markets matters, including a record $80 million penalty for unconscionable conduct, and $115 million in total penalties for the three retail matters.
Since 2016, ASIC has brought 11 civil penalty proceedings against ANZ with fines totalling $310 million.
ANZ said it would submit its Root Cause Remediation PLan to the Australian Prudential Regulation Authority (APRA) on 31 September as part of its enforceable undertaking and that it expected to spend $150 million on implementing the plan. This would be funded by “de-prioriting other initiatives”.
What they said: ASIC chair Joe Longo said: “Time and time again ANZ betrayed the trust of Australians”.
“The total penalties across these matters are the largest announced by ASIC against one entity and reflect the seriousness and number of breaches of law, the vulnerable position that ANZ put its customers in and the repeated failures to rectify crucial issues,” Longo said.
ANZ chief executive Nuno Matos said: “The failings outlined are simply not good enough and they reinforce the case for change. 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”.
