ASB faces possible $6.73m penalty for money laundering ‘shortcomings’

Monday, 15 December 2025

ASB has admitted liability for all seven causes of action brought by the Reserve Bank, it had brought, and has agreed a penalty of $6.73m is appropriate.

ASB says it did not act fast enough to fix “shortcomings” in its anti money-laundering systems, and now faces a possible $6.73 million penalty at the High Court.

On Monday, the Reserve Bank said it had filed civil proceedings in the High Court against ASB for breaches of core requirements under the Anti-Money Laundering and Countering Financing of Terrorism ( AML/CFT) Act 2009.

The laws are designed to reduce money laundering by domestic and overseas criminals through New Zealand banks, and also to prevent money from being channelled to terrorist groups through them.

The Reserve Bank said the breaches at ASB went back to at least December 2019.

It said ASB had admitted liability for all seven causes of action it had brought against the bank, and it and the bank had agreed to jointly recommend to the court that a penalty of $6.73m be imposed, though it is up to the court to decide whether that was enough.

It said ASB’s “non-compliance” related to failures to establish, implement, or maintain an AML/CFT programme that complied in all respects with the requirements of the act.

The Reserve Bank says ASB has admitted breaches of anti-money laundering laws.

That included failures in adequately conducting ongoing customer due diligence, and reporting suspicious activities within the timeframe specified in the act to the New Zealand Financial Intelligence Unit, so law enforcement and intelligence agencies had access to it in a timely manner.

Other failures alleged by the Reserve Bank were failures in ASB conducting “enhanced customer due diligence”, which is a term used for vetting people who were considered a heightened risk, and failing to terminate business relationships as required by the AML/CFT Act.

The Reserve Bank’s acting assistant governor of financial stability Angus McGregor said the anti-money laundering laws had been in place for over a decade, and the Reserve Bank expected banks to have the systems and resources in place to be fully compliant with it.

“Banks who do not comply increase risk for New Zealanders and our financial system,” he said.

“Non-compliance with account monitoring and reporting requirements denies New Zealand law enforcement and intelligence agencies access to crucial time-sensitive information that is needed to detect and deter criminal activity.”

Vittoria Shortt, chief executive of ASB.

In a statement, ASB acknowledged and accepted responsibility for breaches of its AML/CFT obligations.

ASB chief executive Vittoria Shortt said: “Our transaction monitoring and customer due diligence systems and processes had shortcomings, and we did not act fast enough to resolve these. We didn’t get this right and I apologise for that.”

“We cleared all backlogs of transaction monitoring alerts by February 2024. We have uplifted, and continue to uplift, our processes to improve our AML-CFT capability, including expanding our teams and investing in technology.”

Shortt said: “Banks play a very important role in helping to detect financial crime and safeguarding our financial system.”

And, she said, there were no allegations that ASB was directly involved in money laundering, or the financing of terrorism.