Australian regulator increases ANZ's capital reserve requirements due to risk issues, ANZ shares drop 3.6%

From Yahoo Finance: 2025-04-02 17:13:00

Australia’s bank regulator, APRA, increases ANZ Group’s cash reserve requirements due to non-financial risk management issues. ANZ must now hold A$1 billion in reserve, up from A$750 million, following a previous increase. The regulator accepts an enforceable undertaking from ANZ to address these issues. ANZ shares drop 3.6% in response.

ANZ was asked by the regulator in August to conduct an independent review after suspected misconduct in its bond trading unit. Reports suggest ANZ overstated the value of government bonds by over A$50 billion. APRA states that issues in the bond trading unit may extend to other areas of the bank, requiring a more comprehensive remediation program.

APRA finds ANZ’s current remediation program insufficient to address broader non-financial risk weaknesses. ANZ accepts all recommendations of the review and commits to immediate actions. Mark Evans appointed as group head of non-financial risk program delivery. Outgoing CEO Shayne Elliott acknowledges more work needed in the next two to three years.

Analysts predict increased cost pressures for ANZ due to the required investment in risk and compliance systems over a multi-year period. Sandstone Insights notes that this could lead to higher expense growth not fully factored into consensus estimates. ANZ aims to strengthen non-financial risk practices despite the financial impact.



Read more at Yahoo Finance: Australian regulator increases ANZ’s capital add-on, criticises bank’s risk culture