ANZ bank will scrap individual bonuses for all staff below an executive level, following a royal commission investigation into misconduct in Australia's financial industry.
The Melbourne-based lender said that from October 1, individual bonuses would be replaced with a group performance dividend, which will be calculated using risk, financial, customer, people and reputation considerations, AAP reported.
According to AAP, ANZ will still pay about A$4.75 billion ($4.9b) in personnel costs.
"The royal commission rightly shone a light on the negative impact the over-emphasis on individual bonuses within a bank can have on customers and the community," ANZ chief executive Shayne Elliott said in a statement today.
"We are taking action to rebalance the way we pay people so that variable remuneration is a smaller part of our people's take home pay with these reduced bonuses to be determined by the overall performance of the bank."
Elliott insisted removing individual incentives would improve collaboration across the business and benefit customers, shareholders and the broader community.
In his final report into Misconduct in the Banking, Superannuation and Financial Services Industry, commissioner Kenneth Hayne said: "In almost every case, the conduct in issue was driven not only by the relevant entity's pursuit of profit but also by individuals' pursuit of gain."
The royal commission report made 76 recommendations to overhaul the industry.
At the time, Australian Treasurer Josh Frydenberg slammed a banking culture which he said had "broken businesses" and the stress and personal pain that had "broken lives".
"It's a scathing assessment of conduct driven by greed and behaviour that was in breach of existing law and fell well below community expectations," he said upon the release of the recommendations.
One of the biggest concerns was how bonuses can in many circumstances encourage misconduct among banking staff.
The bosses of the big banks were all grilled on the way these bonuses could lead to questionable behaviour, with the royal commission recommending the adoption of an alternative approach that didn't leave customers susceptible to overt displays of greed.
The decision by ANZ to scrap these bonuses shows the message did not go unheard.