The ANZ Group Holdings Ltd (ASX: ANZ) share price is starting the week in the red.
In morning trade, the banking giant's shares are down 1% to $32.86.
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Why is the ANZ share price falling?
Investors have been hitting the sell button after the big four bank announced that it has reached an agreement with the Australian Securities and Investments Commission (ASIC) to resolve five separate regulatory investigations.
The settlement, which still requires Federal Court approval, will see ANZ pay a total of $240 million in penalties. The issues span both its Australian Markets and Australia Retail divisions.
The largest penalty is $85 million for ANZ's role as duration manager in the execution of a 2023 issuance of 10-year Treasury Bonds by the Australian Office of Financial Management (AOFM). ASIC has not alleged market manipulation, but ANZ conceded it could have communicated better and has offered to repay the revenue it earned as a goodwill gesture. It stated:
It is ANZ's view that no loss was caused to the Commonwealth from its trading as duration manager. However, given ANZ could have executed its role as duration manager with better communication, ANZ has offered to pay the AOFM the revenue it earned as duration manager as a goodwill gesture.
What else?
Other penalties include $40 million for inaccurate reporting of secondary bond turnover data, $40 million for failing to pay acquisition bonus interest on certain Online Saver accounts, $40 million for breaches in its handling of hardship notices, and $35 million relating to deceased estates.
ANZ 's chairman, Paul O'Sullivan, admitted that the bank had fallen short and apologised for this. He said:
While we have worked hard to get regulatory certainty on these matters, the reality is we made mistakes that have had a significant impact on customers. On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable.
The bank's new chief executive officer, Nuno Matos, said the findings highlight the need for change. He said:
The failings outlined are simply not good enough and they reinforce the case for change. It is my expectation that we see measurable improvements across the bank to better protect and care for our customers and to create a more sustainable business.
What's next?
ANZ has launched an ASIC Matters Resolution Program within its retail business to improve oversight and governance in areas such as hardship processes, online saver accounts, and deceased estates.
In addition, Promontory has been appointed as an independent expert to review its progress.
The bank will also submit a Root Cause Remediation Plan to APRA later this month, with around $150 million earmarked for implementation in FY 2026. The plan follows an enterprise-wide review that identified persistent weaknesses in non-financial risk management, culture, and accountability.
