‘Serious issues’: ANZ to learn its fate over governance scandal by mid-year

The corporate regulator will finalise its high-profile investigation into corporate governance failures at ANZ by the middle of the year, but remains concerned there are “serious issues” at the bank.

Australian Securities and Investments Commission chair Joe Longo said the probe into allegations ANZ traders manipulated the bond rate was one of the most complex investigations the regulator had undertaken, and claimed the blue bank had been taking the matter “very seriously”.

Joe Longo said ASIC’s high-profile investigation into ANZ was one of the most complex investigations the regulator had undertaken.Credit: Justin McManus

“The fact we are still investigating means we still have concerns,” Longo said in an interview with The Age and Sydney Morning Herald.

“An investigation, by definition under our law, means that we suspect there’s been a contravention of the law. It’s pretty basic stuff. So you can assume that the fact that I can confirm the investigation is continuing towards its latter stages that we remain concerned there are serious issues we are still bottoming out, and we expect to make an announcement hopefully by the middle of the year.”

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 ASIC.

Separately, the Australian Prudential Regulation Authority hit ANZ with a $250 million capital add-on charge last year after it admitted its markets unit inflated its bond trading figures to the federal government, and a workplace complaints investigation found traders in the Sydney dealing room were inebriated during working hours.

ASIC sources last month told this masthead the regulator was set to finalise the probe by April and likely to launch litigation against ANZ, in a sign investors had uncovered evidence supporting the allegations. External lawyers were assessing ASIC’s brief of evidence, which would likely home in on the most egregious examples for its case.

Longo declined to comment on his confidence in the ANZ board to fix cultural governance issues after it appointed former HSBC banker Nuno Matos to replace chief executive Shayne Elliott as part of a clean slate appointment, but said ASIC would be “watching very carefully”.

“I will no doubt be introduced to the new CEO when he starts [on July 3] and take it from there,” Longo said.

Meanwhile, The Australian on Tuesday reported ASIC was also investigating allegations ANZ incorrectly calculated interest on thousands of customer savings accounts, and the bank’s hardship provisions. Longo said he could not comment, other than to say ASIC “maintained a program of institutional supervision for all the banks”.

But he put the entire industry – as well as super funds and insurers – over their handling of customer hardship applications, outlining it as a priority for ASIC in 2025.

“When you really step back about what sectors really affect all Australians … there’s banking – we all have to have a bank account – there’s insurance – it’s pretty hard to get through life without at least one insurance policy – and there’s superannuation – we all should have a superannuation account,” Longo said.

“The way that works for ordinary Australians is hugely important. So we’re rather concerned that Australians are being let down in the insurance sector and superannuation sectors at the moment.”

Longo said ASIC would focus on insurers’ handling of claims, including transparency on premiums, misleading loyalty discounts, and being better prepared for natural disasters; while super funds will be scrutinised over their handling of members’ retirement savings.

The regulator last year sued super fund Cbus for alleged systemic failures in handling members’ insurance claims; took insurer QBE to court for allegedly misleading customers over pricing discounts; and launched litigation against National Australia Bank for allegedly failing to appropriately deal with hardship complaints.

It started 109 investigations in the final six months of 2024, up 31 per cent on the year before, and recorded 138 successful summary prosecutions, up 33 per cent compared to the previous year.

Longo said ASIC, which is still being criticised for being too meek, had finally become the “confident, modern and ambitious” regulator it had set out to achieve following the banking royal commission.

“I really feel that going into 2025 the agency is very much on the front foot, and my priority, so far as the agency is concerned, is to keep it there, is to consolidate and embed that progress,” Longo said.

Longo also highlighted the importance of ASIC’s work on digital transformation, saying this was an “existential risk” for the regulator. He said that over time, ASIC would become less relevant if it failed to make the necessary investments in technology, and it was talking to the government about funding for this purpose.

ANZ declined to comment.

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