ANZ finds no evidence of market manipulation in bond trading

By Rishav Chatterjee

(Reuters) -ANZ Group said on Thursday that its investigations into bond sales that are the subject of a regulatory probe have so far found errors in data reporting but no evidence of market manipulation.

Australia’s fourth-biggest bank by assets has said it will “get to the bottom” of any irregularities in its bond trading operations and will hold anyone accountable for wrongdoing.

“We have also reviewed recent data submissions provided to relevant customers and although there will be ongoing work, we don’t believe we have material issues with the data we have submitted,” CEO Shayne Elliott said in a statement.

ANZ has told the Australian Office of Financial Management (AOFM) that it overstated the value of government bonds it traded 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 has declined to confirm the accuracy of the figure.

Data anomalies were caused by issues including process and data extraction errors on ANZ’s part, the bank said on Thursday.

The errors resulted in the inclusion of transactions which should have been omitted, the bank said. Double counting of transactions occurred as well, it said.

ANZ also confirmed it reported incorrect data around monthly secondary bond turnover for the fiscal year through September 2023 and informed the AOFM of the matter in August of that year.

The bank said its external counsel has engaged independent experts to analyse trading data.

“The big unknown at this point is – just how big is any potential financial fallout for the bank?” said market analyst Tim Waterer at KCM Trade.

“That’s the grey area that investors need to try and navigate between now and the completion of the ASIC investigation.”

ANZ’s share price fell 0.9% to A$29.24 in morning trade versus a 1.2% decline in Australia’s financial sub-index.

Elliot in the statement said he has asked ANZ’s internal audit team to review governance and control frameworks which support similar submissions of data to customers and to report findings to the board.

The AOFM did not immediately respond to a request for comment. ASIC said it had no further comment.