ANZ has announced it will suspend providing secured asset finance loans for retail customers in Australia.
The announcement that ANZ will suspend providing secured asset finance loans comes after the Federal Court found the bank's former Esanda car finance business breached responsible lending laws.
On 28 February 2018, the Federal Court ordered ANZ to pay a penalty of $5 million for breaches of the responsible lending provisions by Esanda.
The suspension of the retail consumer finance business, which ANZ says represents less than 1 per cent of its Australian business, does not apply to commercial customers, according to a statement by the bank on Friday.
ANZ managing director for retail distribution Catriona Noble said: "Given the increased technology costs required to effectively compete in the secured consumer asset finance market, we have decided to suspend all new loans while we conduct a detailed review of the business."
"Our secured consumer asset finance product represents less than one per cent of revenue within our broader Australian business, so we need to assess if it is better for our customers, shareholders and employees if we focus our investment on areas of our business that are core to what we do," she said.
"Providing asset finance solutions for commercial customers remains a core business for ANZ and we will also continue to service existing retail customers for the duration of their loans," Ms Noble said.
The suspension of new loans is effective 30 April 2018. The review is expected to be completed by 30 September 2018.