ANZ Group Holdings Ltd. has come under scrutiny for allegedly inflating the value of government bonds traded by more than A$50 billion ($34 billion) over a one-year period, according to a report by the Australian Financial Review (AFR).
The Australian Office of Financial Management (AOFM), responsible for managing government bond sales, was informed by ANZ that there were inaccuracies in the reported turnover data, the AFR disclosed. ANZ reportedly acknowledged a potential issue in its bond trading data reporting processes, stating it has notified the Australian Securities and Investments Commission (ASIC) and the AOFM, while undertaking an internal review of its procedures.
The news surfaces amid an ongoing ASIC investigation into the handling of a government bond sale last year, raising concerns of possible market manipulation.
A spokesperson from the Treasury department refrained from commenting further, citing the ongoing ASIC investigation.
The discrepancy in turnover data was reportedly flagged by a trader hired by ANZ in March last year, the AFR revealed. The AOFM does not publicly disclose quarterly data from individual banks, but rather an aggregate figure for secondary market turnover provided by each bank.
ANZ initially reported facilitating A$137.6 billion in government bond trades for the year ending June 2023, later revising this figure down to A$83.2 billion, according to the AFR.
In the financial year 2022-23, ANZ received A$6.2 million for its role in syndicated issuances of Australian government bonds, topping the list of banks. Commonwealth Bank of Australia, Westpac Banking Corp., and National Australia Bank Ltd. jointly followed with A$3.1 million each.
Despite its prominent role in bond trading, ANZ notably did not participate in Australia’s inaugural green bond sale in June, where competitors CBA, Westpac, NAB, UBS Group AG, and Deutsche Bank AG were lead managers.
ANZ has previously faced scrutiny for alleged misconduct, including involvement in rigging the bank bill swap rate, resulting in significant fines following settlements with ASIC.
