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ANZ has released the findings of its review committee that examined the bank's involvement in securities lending and its relationship with broker clients including the Opes Prime group (Opes).

The review committee identified breaches of ANZ's Code of Conduct by two employees who the bank has announced will leave ANZ.

In April ANZ's CEO Mike Smith announced that the thorough review of the issues surrounding ANZ's securities lending business would be conducted and released to the public. Smith was assisted by David Crawford, who has a background in financial services and insolvency administration, and three other

senior ANZ executives.

The review committee examined business practice, governance and management accountability related to the securities lending business within ANZ and developed a remediation plan to address its findings.

The report addresses broader legal issues, particularly those associated with the losses incurred by the clients of Opes. Those issues are the subject of several legal actions and commercial mediation involving the Opes administrators, the Australian Securities and Investments Commission and other financiers. ANZ said that it continues to believe it has a strong legal position in relation to these claims.

"The release of this report delivers on a commitment to provide an open and transparent account of ANZ's involvement

in securities lending, to examine accountabilities within ANZ and to identify the remedial actions necessary," said Smith. "The review committee found weaknesses in the management and oversight of the equity finance business within ANZ's securities lending unit. Taken together, this meant that ANZ did not adequately identify and manage the range of risks which arose from the operation of a business of this nature."

"In reviewing this issue, it's clear the findings have some wider implications for ANZ's management of other non-traditional businesses, particularly in our Institutional Division. We have developed a comprehensive 13-point remediation plan to address all the management, control and accountability issues identified in the report. I believe this plan will provide

ANZ with a step change in the management of risk, particularly in Institutional, and will draw a line in the sand at ANZ about performance and accountability in the future," said Smith.

A range of other management accountability issues associated with the operation, management and oversight of the Equity Finance business were also identified. As a result, ANZ has taken action involving a number of employees. This includes formal notes placed on employment records, cuts to remuneration and the departure from ANZ of six managers and executives.

A number of executives who have already left the Institutional Division would also have been subject to employment sanctions had they remained at ANZ.

Smith commented:

"We have dealt clearly and squarely with the accountability issues and have a comprehensive remediation in place to address the short comings in management and control we have identified particularly within Risk Management and the Institutional Division. However, I do recognise the legacy of ANZ's involvement in Equity Finance may well be with the group for some time through legal claims that we will continue to defend and the impact of these issues to our reputation."

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