ASIC probes ANZ over Treasury bonds sale

The corporate regulator is investigating suspected legal breaches in 2023 Treasury bond issuance.

ASIC is investigating ANZ Bank over its role in a 2023 government bond issuance. Picture: NCA NewsWire / Kelly Barnes

The corporate watchdog is investigating ANZ Bank over its role in the sale of government bonds last year.

The big four bank on Monday said the regulator was probing its execution of a 10-year Treasury bond issuance by the Australian Office of Financial Management (AOFM), the agency tasked with managing government debt.

“ANZ notes that the Australian Securities and Investments Commission is investigating ANZ’s execution of a 2023 issuance of 10-year Treasury bonds by the Australian Office of Financial Management,” the lender said in a statement.

“ANZ understands that ASIC is investigating suspected contraventions of a number of provisions of the ASIC Act and the Corporations Act.

“ANZ takes compliance with its regulatory obligations seriously and is co-operating fully with ASIC.”

The lender provided no further details on the investigation and ASIC declined to comment. An AOFM spokesperson said it was “routine for the AOFM to debrief ASIC on all of its syndicated bond issues”.

“The AOFM has made no specific complaint to ASIC about ANZ,” the spokesperson told The Australian.

The AOFM uses the big four banks, as well as global investment banks such as Deutsche Bank, UBS and JP Morgan, among others, when issuing long-dated bonds via syndication. Using this method for the sale process, the banks advise on market conditions and source investor demand but the agency determines the price, deal size and allocations.

There were two long-dated treasury bond transactions in 2023, with ANZ involved in just one: a $14bn issuance that took place in April last year, with Commonwealth Bank of Australia, Deutsche Bank and National Australia Bank also taking part in the debt sale as joint lead managers. ANZ said it acted as a risk manager in relation to the issuance.

ANZ was not involved in a second long-dated debt sale that took place in October last year, at $8bn, with that being run by joint lead managers Barrenjoey, CBA, JP Morgan, UBS and Westpac.

The bank has acted as a joint lead manager in at least 14 of 26 AOFM long-dated bond issuances since 2011. It earned $3m for its role in the April 2023 debt sale.

ANZ, alongside its big four peers, fell foul of ASIC in 2016 when the regulator accused a group of lenders of engaging in market manipulation and unconscionable conduct by rigging the bank bill swap rate. The BBSW provides a benchmark for setting interest rates across a range of products including personal and business loans. ANZ eventually admitted to manipulating the bank bill swap rate to its advantage and paid a $50m penalty.

ANZ shares declined 0.3 per cent to $28.18 on Monday as the stock traded ex-dividend.