👉 Background: ANZ is the fourth largest bank in Australia, with over 8.5 million retail and business customers. Just last week ANZ was in the news for cutting its workforce by 4,500 jobs.

‍👉 What happened: In 2023, ANZ was trusted as one of the managers for a $14 billion government bond deal. But ANZ has admitted that some of its staff had acted with misconduct with the trading of these government bonds. On top of that. ASIC's investigation identified a whole range of other breaches within different divisions of ANZ:

• ANZ overstated the volumes of bonds traded by billions of dollars.
• ANZ failed to respond to customer’s hardship notices in a timely manner
• ANZ had made misleading statements about their savings interest rates
• ANZ failed to refund fees charged to thousands of dead customers’ accounts

So now, they’re being slapped with a record $240 million fine for ‘unconscionable conduct’ from ASIC.

👉 What else: ANZ has a lot of making up to do to its customers and regulators under its new CEO. But at least they’ll be glad that this complex government bond saga is finally behind them.

‍What's the key learning?

‍💡Government bonds are financial instruments that help governments borrow money from investors to help fund critical services in Australia, including education, infrastructure, healthcare, social welfare and more. In return for purchasing the bond, bond investors are promised a repayment with interest at a later date, also known as a coupon rate.

💡In this case, ANZ was supporting the government in selling $14 billion worth of bonds, but they allegedly made trades that pushed the coupon rates higher, which made the government pay more interest to investors. Shortly after, ANZ flipped its trades and then made a tidy profit when the value of the bonds went up again.

💡It’s believed that ANZ’s misconduct could have cost the government (aka taxpayers) up $80 million. So, while ANZ has copped a $240 million fine, this is still only 6.6% of its half-yearly profit after tax.