Australia Markets Cop Says ANZ Must Avoid a ‘Dark Day’ Repeat

(Bloomberg) — Australia’s top securities regulator said ANZ Group Holdings Ltd.’s new chief Nuno Matos still has a lot of work to do to ensure that past misconduct doesn’t reoccur, after the bank agreed to pay a record fine on Monday.

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“It’s an opportunity for Nuno and his team to say, well, this has been a dark day for ANZ,” said Joe Longo, chair of the Australian Securities & Investments Commission, in an interview.

Matos has “inherited some very significant issues,” but the lender can now try to “reset and renew, and to reinvest in a way that possibly under previous management wasn’t happening,” said Longo, a 65-year-old former Wall Street bank lawyer.

ASIC on Monday said it has wrapped up a long-running investigation into ANZ that culminated in a A$240 million ($160 million) penalty on the firm. Melbourne-based ANZ also admitted to “widespread misconduct” across its institutional business and retail banking divisions that occurred over many years and impacted close to 65,000 customers.

Longo said around 20 to 30 of his staff were involved in the investigations. It found that ANZ overstated bond trading volumes in its reports to the government by tens of billions of dollars, made misleading statements about its savings interest rates, and failed customers of its retail bank in multiple ways.

‘Betrayal of Trust’

“I think the unconscionable conduct part of things was particularly serious,” Longo said, referring to how ANZ acted when it was managing a A$14 billion bond sale for the Australian government in 2023.

There was “a very serious departure from what an institution of its standing should have been doing, a real betrayal of trust,” he said. Compliance staffers didn’t keep proper records, and it was a failure of non-financial risk management, Longo added.

Matos, who joined ANZ from HSBC Holdings Plc, is four months into his role leading Australia’s second-biggest bank by assets.

The 57-year-old Portuguese financier has begun dismantling the legacy of his predecessor, Shayne Elliott, by shaking up the lender’s senior ranks, cutting jobs, and revamping its legal and compliance roles. The moves have unnerved ANZ staffers and drawn some internal criticism for their harshness.

ANZ “has a lot of work ahead of it to make sure it doesn’t happen again,” Longo said.

Longo has been ASIC’s chair since 2021, and his current term is due to expire in 2026.