Culture as Capital Risk — Lessons from the ANZ Breakdown

Now that intangible risks are becoming materially consequential, few cases better illustrate the price of cultural failure than the one unfolding at ANZ. In March 2025, the Australian Prudential Regulation Authority (APRA) imposed a $1 billion capital charge on the bank, citing persistent governance failures and an organizational culture that allowed misconduct to fester unchecked.

This was not a case of financial fraud or a high-profile cyber breach. It was the slow erosion of internal accountability—fueled by poor leadership, ineffective escalation channels, and a widespread underestimation of non-financial risks. As APRA Chair John Lonsdale put it, ANZ’s problems were “persistent and prevalent,” with echoes of similar issues already observed at its peer institutions.

The implications extend far beyond Australia’s banking sector. The ANZ case is a clear signal to global risk leaders: organizational culture is now a capital issue.