APRA lifts ANZ capital overlay, accepts enforceable undertaking
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The news: The Australian Prudential Regulation Authority (APRA) has increased the capital add-on applied to ANZ Bank by $250 million and accepted a Court Enforceable Undertaking (CEU) from the lender to address ongoing weaknesses in its non-financial risk management practices.
The numbers: APRA increased the capital add-on applied to ANZ from $750 million to $1 billion. It had previously lifted the capital add-on from $500 million to $750 million in August 2024.
The context: The APRA action comes after long-standing concerns by the prudential regulator over ANZ’s non-financial risk management practices and risk culture which include weaknesses in the bank’s operational risk and compliance management and a reactive risk culture. More recently, several issues emerged in ANZ’s markets business after it admitted to misreporting bond trading data in FY23. An independent review was commissioned to determine the root causes and the spread of the problems. “The findings of the independent review have lent further credence to APRA’s concerns,” the regulator said on Thursday.
ANZ announced it has accepted all recommendations of the independent Oliver Wyman review, and said it was taking a number of immediate actions. ANZ institutional boss Mark Whelan will oversee the implementation of the 19 recommendations, and 53 sub recommendations, from the review. He will report to the board.
