ANZ Bank is set to pay a record penalty of $240 million due to serious misconduct affecting both retail customers and the Australian government. The Australian Securities and Investments Commission (ASIC) announced the settlement, which requires approval from the Federal Court.

The penalty includes $125 million related to the bank's management of a $14 billion government bond deal. ASIC accused ANZ of misreporting trading data and acting in an unconscionable manner. This misconduct potentially limited the funding available to the government.

Additionally, $115 million of the penalty addresses issues with retail customers. ANZ failed to respond to hundreds of hardship notices from customers, with some cases unresolved for over two years. The bank also made false claims about savings rates, resulting in tens of thousands of customers not receiving the promised interest. Furthermore, ANZ did not refund fees to many deceased customers and was slow to assist families managing deceased estates.

ASIC chairman Joe Longo stated, "The total penalties across these matters are the largest announced by ASIC against one entity and reflect the seriousness and number of breaches of law, the vulnerable position that ANZ put its customers in and the repeated failures to rectify crucial issues."

ANZ chairman Paul O’Sullivan expressed regret on behalf of the bank, acknowledging that it had not adequately held executives accountable for these failures. He stated, "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."

The settlement marks a significant moment for ANZ as it seeks to address the fallout from these allegations and restore trust with its customers.