ANZ bulks up risk team in wake of bond scandal

The bank will hire a new head of regulatory relations as it battles allegations of market manipulation.

ANZ is adding to its operational risk team, including establishing a new head of regulatory relations. Picture: Lisa Maree Williams/Getty Images

ANZ is bulking up its operational risk team as it battles allegations of market manipulation, creating two new senior roles, including a new head of regulatory relations.

The head of regulatory relations – the bank is understood to be in the process of recruiting for the position – will have a remit of strengthening the bank’s interactions with key regulatory bodies, including the Australian Prudential Regulation Authority and the Australian Securities & Investments Commission, The Australian understands.

The new hire will need to anticipate and navigate the regulatory environment and matters that could impact ANZ, provide strategic advice on regulator perspectives and the potential impact on ANZ activities, and contribute to the response to regulatory inquiries, audits, and investigations.

The bank has also created a second senior role, group general manager for operational risk, to help drive improvements to its non-financial and operational risk practices.

This role will sit in the risk function on the risk leadership team and report to chief risk officer Kevin Corbally, with responsibilities to include ensuring operational risk is better integrated into strategic decision-making processes.

The move to establish the new risk roles comes after a horror year for the bank as regulators probe its alleged market manipulation of a $14bn government bond sale in 2023.

The investigation by the corporate regulator, which has been underway all year but only came to light in June, has been followed up by the prudential regulator imposing a $250m capital penalty on the bank and ordering a cultural review of the business.

The scandal has also cost the bank’s senior leadership millions of dollars.

“To further strengthen the bank’s management of non-financial risk, ANZ is making a number of changes to our senior operational and non-financial risk roles,” an ANZ spokesperson said.

“These changes announced today will play a critical role in driving better risk outcomes across the bank, by strengthening our non-financial and operational risk strategy, improving the way we manage risk and embedding change across the organisation.”

The scandal-hit banking giant unveiled an 8 per cent drop in cash profit, to $6.7bn, at its full-year results released last week, with higher costs, lower returns and the lumpy integration of Suncorp Bank and new technology ­systems all hitting its bottom line.

CEO Shayne Elliott said the bank was focusing on improving non-financial risk practices in the wake of the $250m penalty from the prudential regulator and scandal in the markets business.

“This, along with continuing to drive a strong speak-up culture, is a key focus of mine as CEO – as well as across the bank more broadly,” he said.

ANZ shares closed down 4 per cent at $31.27, as it went ex-dividend.

Originally published as ANZ bulks up risk team in wake of bond scandal