Two dismissed traders at ANZ Bank's Australian operations have sued the bank for A$30 million, claiming the bank tolerated a culture of sex, drugs and alcohol.

Two traders, Etienne Alexiou and Patrick O'Connor, were sacked for inappropriate or offensive electronic communication. Misuse of a company-issued credit card was also part of the reason behind Mr O'Connor's dismissal.

Mr Alexiou has filed a A$30 million claim against ANZ, which includes an allegation of a senior ANZ markets trader saying a "white substance" found in the male toilet should have been "sprinkled on a birthday cake", according to the Australian Financial Review.

Mr Alexiou claimed the culture on the dealing floor was at odds with the official levels of conduct demanded by the bank.

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The AFR reported Alexiou was fired by the bank last September for alleged offensive and inappropriate language in emails and Bloomberg chat. The chats included disparaging comments to women and references to strip clubs and drugs, according to ANZ's termination letter submitted to the Fair Work Commission cited by AFR.

Mr O'Connor claims ANZ "created, supported and encouraged" the "toxic and unsafe culture".

The AFR reported it had been aware of "an out-of-control culture" on the bank's trading floor before Mr Alexiou and Mr O'Connor's claims were lodged in the Federal Court.

ANZ told the AFR yesterday that the staff were dismissed for serious breaches of its code and it would "be vigorously defending both their court applications".

"Mr O'Connor and Mr Alexiou's claims are difficult to read for all of us at ANZ but common sense says their behaviours are not consistent with our code of conduct and cannot be tolerated," ANZ's chief risk officer, Nigel Williams, told the AFR.

Mr Williams said ANZ had "already identified that many of the allegations made in both claims are not accurate and these inaccuracies will become apparent as the matters proceed through the court system".

He said ANZ would investigate allegations made about existing and former staff "that are bought to our attention either through our own management and monitoring or those raised by current or former staff".