During a hearing in front of the Australian Parliament on Friday, ANZ CEO Shayne Elliott said that he and senior executives would take accountability for the "reputational damage" caused by a number of scandals currently facing the bank.
"People are asking questions about the way we do business and treat customers – that is hurting our reputation," Elliott said. "We have suffered reputational damage. That is on me. I accept that there will be consequences." The bank has faced scrutiny from all sides, as it is under investigation for alleged market manipulation during a $14 billion government bond sale. It has also admitted to providing inflated bond turnover data to regulators, and is currently reviewing the workplace culture that has allowed these issues to propagate.
Elliott confirmed that three traders had left the bank, while a fourth received a warning. He denied that the situation had spiraled out of control, assuring that "[t]here is no scandal." However, Elliott acknowledged some cultural issues at the bank, such as the "use of profanity in the dealing room" and alcohol consumption during work hours.
Elliott revealed that the Australian Securities and Investments Commission (ASIC) was investigating unusual market movements following the aforementioned bond issuance. Although no formal allegations have been leveled, ASIC has requested nearly a million documents and conducted interviews with traders and compliance officers. Additionally, ANZ has admitted to supplying inflated bond trading data, discovered by a new trader, though Elliott insisted it was a mistake.
These scandals, on top of a history of risk management shortcomings, led the Australian Prudential Regulation Authority to impose an additional $250 million capital charge on the bank late last month, bringing its total operational risk capital add-on to $750 million.
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