This decision follows APRA's harsh criticism of ANZ's oversight of non-financial risks, indicating ongoing issues that need to be addressed.

As part of the regulatory response, APRA has mandated ANZ to increase its capital buffer by A$250 million, raising the total to A$1 billion to mitigate potential operational risks.

Analysts anticipate that the changes required by the enforceable undertaking will lead to increased cost pressures for ANZ, affecting future expense growth estimates.

ANZ has acknowledged and accepted all recommendations from the independent review, which included interviews with over 110 staff, and is taking immediate actions to address APRA's concerns.

To oversee the implementation of the review's recommendations, ANZ has appointed Mark Evans as head of non-financial risk program delivery and created a new operational risk general manager position.

Outgoing CEO Shayne Elliott has recognized the need for further improvements in non-financial risk practices over the next two to three years, despite the bank's strong financial position.

The Australian Prudential Regulation Authority (APRA) has raised serious concerns regarding ANZ's non-financial risk management and reactive risk culture, as highlighted in an independent report.

In response to these findings, APRA has accepted a court-enforceable undertaking from ANZ Group aimed at enhancing its risk management practices.

At its annual general meeting in December, ANZ's board withdrew a A$3.2 million bonus for retiring CEO Shayne Elliott following shareholder dissatisfaction.

ANZ Chairman Paul O’Sullivan expressed disappointment over the bank's failure to meet APRA’s expectations regarding non-financial risk management and acknowledged the need for improvement.

APRA's chair, John Lonsdale, has noted ongoing weaknesses in operational risk and compliance management within ANZ, emphasizing the importance of a robust non-financial risk regime.

The bank has faced reputational damage due to a bond trading scandal and failings in its global markets division, leading to investor discontent over executive pay.