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Written by Rishav Chatterjee
ANZ Group said on Thursday its investigation into bond sales under regulatory scrutiny had so far found errors in reporting trade data but no evidence of market manipulation.
Australia’s fourth-largest bank by assets said it would “get to the bottom” of any irregularities in its bond trading operations and hold anyone found guilty to account.
The bank said on Thursday it was considering whether to take action against senior executives, including Chief Executive Shane Elliott, over misleading trading data.
“We have also reviewed recent data provided to affected clients, and while there will be ongoing work, we do not believe we have material issues with the data we provided,” Elliott said in a statement.
ANZ has told the Australian Office of Financial Management (AOFM) that it overvalued the government bonds it trades by more than A$50 billion ($33.81 billion) over a one-year period, the Australian Financial Review reported.
The Australian Securities and Investments Commission (ASIC) subsequently opened an investigation.
ANZ declined to confirm the accuracy of the figure.
ANZ also said on Thursday it was investigating whether it should have reported the issue to the corporate regulator before it actually did.
The bank said on Thursday that the data anomaly was due to issues including process errors and data extraction on ANZ’s part.
The bank said the errors led to the inclusion of transactions that should have been deleted, adding that there was also duplication in the calculation of transactions.
ANZ also confirmed that it had incorrectly reported its monthly subordinated bond turnover for the financial year to September 2023 and reported this to the Australian Financial Markets Authority in August of that year.
“The big unknown at this point is how big the financial fallout for the bank is likely to be,” said Tim Waterer, market analyst at KCM Trade.
“This is the grey area that investors need to try to navigate between now and the completion of ASIC’s investigation.”
ANZ shares fell 0.9% to A$29.24 ($19.17) versus a 1.1% decline in the Australian financial sub-index.
The Australian Financial Markets Authority did not immediately respond to a request for comment. The Australian Securities and Investments Commission said it had no further comment.
(1 USD = 1.5253 AUD)
