APRA Increases ANZ Capital Buffer Amid Risk Concerns

The Australian Prudential Regulation Authority (APRA) has mandated ANZ Group Holdings Ltd. to increase its capital buffer to A$1 billion ($630 million) due to persistent concerns over the bank's non-financial risk management and risk culture. APRA's decision follows a court-enforceable undertaking with ANZ, compelling the bank to address these issues, which include weaknesses in compliance and a reactive risk culture. ANZ is required to conduct a comprehensive review of its organization to identify and rectify potential problems beyond existing issues. While ANZ has accepted all recommendations from an independent review initiated by APRA, the regulator remains unconvinced that these measures alone will suffice for sustainable improvements. ANZ Chairman Paul O'Sullivan acknowledged the bank's failure to meet APRA's expectations in managing non-financial risk. The increase in capital requirements is intended to protect against potential risks until ANZ demonstrates effective risk management improvements.