Shortcomings in ANZ’s Global Markets leadership with regard to the importance and ownership of non-financial risk management (including conduct risk) resulted in a lack of effective embedding of these responsibilities across the business, consultants Oliver Wyman reported to the board of ANZ in a review of ANZ’s Global Markets business and released yesterday.

ANZ’s Global Markets business has drawn media attention due to concerns related to conduct, workplace behaviour, and non-financial risk governance.

Oliver Wyman conducted the review, from October 2024 to March 2025. Weirdly, it “excluded any assessment of matters subject to regulatory investigation or legal action, as agreed with ANZ and APRA prior to the commencement of the review.”

This appears to have excluded the trio of bond trading scandals in the institutional bank, or these have been examined tangentially.

In the chapter on ‘Root causes’ Oliver Wyman related that ANZ’s market’s business suffered from:

•    Inconsistent execution of first and second line non-financial risk management activities by the appropriate functions, leading to unclear risk ownership and insufficient independent review and challenge.

•    A tendency to view issues as isolated and overlook dependencies or systemic concerns, impacting Market’s ability to identify broader risks requiring holistic remediation.

•    A focus on execution that drives action, but centres on implementing activities rather than driving towards outcomes to embed change and reduce risk.

•    A variable Markets culture that was not always strong enough to constrain inappropriate behaviour.

“Previous independent reviews and ANZ’s Risk Governance Self-Assessments have highlighted themes similar to several of those identified here, underscoring their persistence and the importance of comprehensively addressing them” Oliver Wyman said.

“Addressing each of these root causes will require a shift in mindset, behaviours, and, in some instances, the supporting infrastructure.” 

Oliver Wyman recommended that ANZ “either conduct a further detailed assessment of whether the gaps identified in Markets are present elsewhere and/or operate on the assumption they are and apply appropriate remediation on a Group-wide basis.”

This followed a high-level assessment of data and documents from ANZ’s Retail Division to determine if there were any indicators suggesting that the themes identified within the Markets could also be relevant outside Markets. 

The Retail Division was selected as the next largest division after Institutional. 

“We observed many indicators, both positive and negative, of the operating effectiveness of the risk governance infrastructure in the Retail Division that were similar to those observed in Markets” Oliver Wyman said.

APRA has imposed an additional $250 million capital add on in light of the Oliver Wyman review, taking ANZ’s total capital add-on to $1 billion.

APRA said it “has had long-standing concerns over ANZ’s non-financial risk management practices and risk culture. These include weaknesses in ANZ’s operational risk and compliance management and a reactive risk culture. 

“APRA has been taking measures, through reviews and engagements with ANZ, to supervise the bank’s remediation of these weaknesses. However, we have observed that these weaknesses remain present across the bank.”

ANZ, APRA said, has agreed to appoint an independent reviewer to complete a Group-wide review of root causes and behavioural drivers of the persistent weaknesses