ANZ investors surveyed about bank perception amid bond trading probe

ANZ’s investor relations team is going ahead with a shareholder survey of perceptions of the bank which is expected to spur a raft responses about its handling of the bond trading scandal.

It’s likely key investors are providing ANZ their thoughts on the future tenure of CEO Shayne Elliott and institutional boss Mark Whelan. Picture: Dan Peled / NCA NewsWire

ANZ’s investor relations team commissioned a detailed shareholder survey of perceptions of the bank and its communications, proceeding with the poll even though it is embroiled in a bond trading scandal being probed by the corporate regulator.

Sources told The Australian ANZ had global firm Sodali & Co, formerly Morrow Sodali, currently undertaking the qualitative investor survey, which was organised ahead of an investigation by the Australian Securities & Investments Commission into the bank’s conduct on a $14bn government bond issue, becoming public in May.

The poll is expected to spur a raft of investor responses about the regulatory probe and the bank’s handling of the matter, including its disclosures, brand damage and the potential for regulatory fines, pay consequences and executive exits.

That is despite the survey questions not directly addressing the regulator’s ANZ investigation, spanning allegations of irregular trading activity and inflated data reporting from its bond market division. ANZ was the risk manager and a joint lead manager on the $14bn government bond transaction last year.

The bank’s shareholder survey was organised by its investor relations unit, and it’s understood the questions were finalised in late April. ANZ has tended to undertake quantitative surveys of investors in the past, with the qualitative poll being a relatively new option.

ANZ’s board - which is receiving regular updates on the internal investigations being conducted into the $14bn government bond issuance - was not aware of the investor survey.

An ANZ spokesman said: “Just like all major institutions we regularly survey shareholder stakeholders, and have used Morrow Sodali to do so for more than 10 years. This includes a survey currently underway, which was agreed in April 2024 by ANZ investor relations as part of their regular work.”

A former Australian bank chief executive, who spoke to The Australian on the condition of anonymity, said he expected ANZ’s key investors would be giving unsolicited thoughts on the bank’s bond trading scandal via the shareholder survey and independently of it.

The former CEO, who is familiar with the investor feedback process, said it would be “very unusual” if the bond trading investigation was not raised through survey responses, given the issue’s significance.

The former CEO said it was likely key investors would also be offering their thoughts on the future tenure of ANZ chief Shayne Elliott and institutional boss Mark Whelan.

Another banking veteran said large shareholders would make their views on ANZ’s regulatory issues known, some via the Sodali survey.

“Particularly the big investors that have opinions, they will be voicing them,” he said.

The markets and fixed income units sit within ANZ’s institutional division, which was also subject to intense regulatory scrutiny about a decade ago.

The prior matter related to ANZ’s participation in the rigging of the bank-bill swap rate, which was settled with the regulator in 2017, for $50m.

ANZ agreed to an enforceable undertaking program with ASIC in late 2017 in the wake of that issue, and as part of an agreed resolution to court proceedings.

Earlier that year, ANZ entered another enforceable undertaking with the regulator for inadequate systems and controls in its wholesale foreign exchange business.

Macquarie Group’s banking analysts this week said ANZ faced a maximum penalty of about $780m if it was found guilty of unconscionable conduct relating to how it managed the $14bn bond issuance last year. The analysts cautioned, however, any penalty sought by ASIC for breaches of the law could be much smaller.

The ANZ board has signalled potential action against the bank’s leadership team if its investigations or the regulators’ uncover serious wrongdoing or a lack of oversight.

The issues have already led to consequences for some ANZ staff including suspension, termination and a formal warning.

Meanwhile, ASIC has granted an ANZ employee whistleblower status after the trader raised concerns about conduct in the markets division and bank staff providing inflated bonds trading data to the government’s debt management agency.

The Australian Office of Financial Management sits within Treasury and assists in the management of the government’s financing and debt portfolio.

ASIC has served ANZ with formal notices to produce documents, as the regulator weighs up whether to proceed with a legal case over the bank’s bond trading conduct.