The Australian Prudential Regulation Authority (APRA) has increased ANZ’s capital requirements by $250 million, bringing the total capital penalty to $1 billion. This action follows ongoing concerns regarding ANZ’s non-financial risk management, culture, and compliance. APRA described ANZ’s risk culture as “reactive” and noted that despite previous reviews, weaknesses persist across the bank. An independent review by Oliver Wyman supports APRA’s concerns, citing ineffective leadership action on behavioral issues, shortcomings in staff engagement, and gaps in non-financial risk management. These deficiencies, according to the review, have allowed unacceptable behavior to persist and could lead to future material issues.
In response, ANZ has entered a court-enforced undertaking to conduct a thorough review of risks and implement a remediation program. APRA Chairman John Lonsdale stated that while ANZ remains financially sound, its persistent non-financial risk management weaknesses are a priority. The regulator highlighted that similar weaknesses at other banks have led to material prudential issues. Separately, ANZ’s trading division is under investigation by ASIC for trading irregularities related to a $14 billion government bond issuance in 2023.
