ANZ chief Shayne Elliott makes a 13-minute apology to the AOFM over bond trading scandal

Documents show ANZ chief executive Shayne Elliott spent more than 13 minutes apologising to the Office of Financial Management for the $14bn bond scandal.

ANZ chief executive Shayne Elliott. Picture: Arsineh Houspian.

ANZ chief executive Shayne ­Elliott spent 13½ minutes delivering an apology to the CEO of the Australian Office of Financial Management over a bond trading scandal that has resulted in the banking major being frozen out from new deals and examined by the corporate regulator.

In documents released under Freedom of Information, The Australian can reveal ANZ contacted the chief executive of the AOFM, Anna Hughes, nine days before the bank fronted up to ­investors detailing the bank’s ­response to the scandal.

ANZ told investors on July 25 that the bank was looking into three areas of concern in its ­markets business, in the wake of revelations that the Australian ­Securities and Investments Commission was investigating its role in a $14bn bond placement.

This came after the AOFM referred curious trading movements in bond markets, ahead of the ­pricing of a $14bn bond on April 19 last year to the corporate regulator.

The movement in markets concerned the AOFM, which is responsible for issuing Australia’s ocean of public debt, as the swap rate moved quickly against the government ahead of the pricing of the bond, forcing up borrowing costs for the taxpayer.

AOFM chief Anna Hughes

Documents show an ANZ staff member reached out to Ms ­Hughes on July 17, almost two months after news of the scandal broke, offering a chat with Mr ­ Elliott and Mark Whelan, the head of its institutional bank.

In emails released to The Australian, an ANZ staff member apologised to Ms Hughes – appointed to run the government funding agency in November 2022 – for “emailing you directly”.

The ANZ staff member, whose name was redacted by the AOFM, told Ms Hughes that Mr Whelan and Mr Elliott “would like a quick call with you tomorrow to provide an update & I was reaching out to work out a mutual time”.

So unusual was the email, sent at 3.45pm on July 17, the AOFM’s email screening system even cautioned Ms Hughes to beware, noting “you don’t often get email from (Shayne Elliott)”.

But Ms Hughes followed up the email an hour later, agreeing to a chat with the bank chiefs.

Mr Elliott and Mr Whelan quickly agreed the next morning to speak with Ms Hughes.

The Microsoft Teams call, slated to run for 15 minutes, ran short in the end. However, the AOFM declined to release copies of the call, with ANZ only noting on July 25 that Mr Elliott “personally apologised to the chief executive at AOFM for ANZ’s failures”. A legal letter from the AOFM’s chief risk and assurance officer, Erin Martin, notes ANZ “objected to the release of this information”.

“The disclosure of this information would amount to an unreasonable disclosure of personal information,” Ms Martin told The Australian. “I discern no specific public benefit.”

Ms Martin said there was “an overriding public interest in government agencies being able to maintain the security and confidentiality of their internal communication channels”.

Separate FOIs show the July 18 call between Mr Elliott and Ms Hughes was the only call between the two.

ANZ head of institutional banking Mark Whelan. Picture: Arsineh Houspian

In response to a request from The Australian, Ms Hughes wrote that a search of AOFM records showed the agency “holds no documents” detailing calls or text messages between the two.

In a different letter, Ms Hughes noted the AOFM also found “no documents” showing correspondence between her and Mr Elliott this year.

However, the AOFM gift log notes Ms Hughes and two other AOFM officials lunched with ANZ as part of an ANZ Investor Tour in February this year.

The AOFM said the lunch had an estimated $150 value.

Ms Hughes also lunched with ANZ in August last year, alongside two other AOFM staff, spending $450 on the meal.

She also attended a breakfast with ANZ in September last year.

The Australian revealed this week that ANZ’s decision to ­revamp its bond market strategy in 2022 sparked a crisis within its trading team, with some stars quitting and others resorting to risky tactics to deliver profits the following year.

The Australian New Zealand Dollar Bond Initiative, introduced to the bank in 2022, was intended to deliver a crack squad of traders and sales staff to ANZ.

It was crafted to preserve the bank’s access to $100m in annual government bond syndicate fees, while ensuring the bank remained in pole position, with Westpac clawing its way back as chief challenger.

But some ANZ traders in 2022 took issue with the bank’s strategy, which they saw as relying upon them to forgo profit while driving business to the sales team.

ANZ and the AOFM declined to comment.