The Australia and New Zealand (ANZ) Banking Group has been subjected to a substantial penalty of A$240m ($160m) after acknowledging significant regulatory breaches within its government bond operations and retail banking services.

This fine is part of a settlement with the Australian Securities and Investments Commission (ASIC) that addresses multiple investigations into the bank’s conduct.

The penalties include A$85m related to ANZ’s function as duration manager during a 2023 issuance of ten-year Treasury Bonds by the Australian Office of Financial Management (AOFM).

Additionally, the bank faces a A$40m fine for inaccuracies in its monthly secondary bond turnover data submitted to the AOFM over a period of nearly two years, alongside false or misleading annual attestations and failure to report these inaccuracies to ASIC.

Further penalties consist of A$40m for not providing acquisition bonus interest on specific Online Saver accounts and for displaying incorrect interest rates.

ANZ has also been fined A$40m for failing to adequately handle customer hardship notices and A$35m for breaches related to deceased estates.

While ASIC has not alleged any market manipulation or over-hedging by ANZ in its role as duration manager, the bank has conceded that improved communication could have enhanced its performance in this capacity.

As a gesture of goodwill, ANZ has offered to remit the revenue earned from its duration management activities to the AOFM.

ANZ CEO 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.

“Unfortunately, some of our failings occurred when our customers were at their most vulnerable. For this we are deeply sorry, and we are making changes to better support our customers when they need us most.”

In light of these findings, ANZ has launched an ASIC Matters Resolution Program within its Australia Retail division, aimed at improving governance and oversight in various areas, including the Online Saver product, hardship processes, and the management of deceased estates.

The bank has engaged Promontory as an independent expert to evaluate the effectiveness of this programme.

ANZ is also preparing to submit its Root Cause Remediation Plan (RCRP) to the Australian Prudential Regulation Authority (APRA) by 30 September, as stipulated by a Court Enforceable Undertaking.

The bank estimates that it will allocate approximately A$150m towards the implementation of the RCRP in FY26, which will be financed by scaling back other initiatives.

The RCRP follows a comprehensive enterprise-wide independent review that identified ongoing weaknesses in ANZ’s non-financial risk (NFR) management and culture. Key areas of concern included culture, accountability, governance, and prioritisation.

A summary of the identified root causes will be made available once the RCRP is approved by APRA.

ANZ has also confirmed that Promontory will provide independent oversight of its progress in implementing the RCRP.

ANZ chairman Paul O’Sullivan said: “While we have worked hard to get regulatory certainty on these matters, the reality is we made mistakes that have had a significant impact on customers.

“On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable.

“While ASIC has not alleged that ANZ engaged in market manipulation, it’s clear we have not met the standards expected of us. We have apologised to the AOFM for the inadequate communication on this transaction and offered to pay the AOFM the revenue ANZ earned as duration manager.”