Powered by MOMENTUM MEDIA
subscribe to our newsletter

NAB pays out additional $314m

National Australia Bank has announced that its cash earnings will be impacted by a total of $314 million as it refunds and compensates its customers over wealth advice issues.

The big four bank revealed that its cash earnings for the second half of the financial year will be impacted to the tune of $314 million, reducing cash earnings by $261 million and earnings from discontinued operations by $53 million.

According to the bank, these costs are largely due to “several customer remediation matters”, including refunds and compensation to customers impacted by issues in NAB’s wealth business, including adviser service fees, plan service fees, the wealth advice review and other wealth-related issues.

Of the cash earnings impact, approximately 69 per cent of these costs will impact revenue, with the balance reported in expenses.

Several of these issues were highlighted during the ongoing financial services royal commission, and all the major banks have been refunding and remunerating customers affected by past misconduct in the wealth space.

Advertisement
Advertisement

NAB’s $314 million also covers the costs for implementing remediation processes and associated regulatory compliance matters. However, the costs associated with responding to the royal commission are not included in these additional charges.

Further to this, the major bank has intimated that further customer remediation programs will be announced in due course, stating that while the total cost of these remain “uncertain”, they will continue into the 2019 financial year.

Further details are expected when NAB releases it 2018 full-year results on 1 November.

Speaking on Tuesday (16 October), NAB’s chief executive officer, Andrew Thorburn, said: “Where we have let customers down we are determined to put things right. We have made good progress in resolving a number of issues that impacted our customers and we want to compensate them as quickly as possible.”

NAB has said that it remains well positioned to meet APRA’s “unquestionably strong” benchmark in “an orderly manner” by January 2020.

PROMOTED CONTENT


[Related: Fees-for-no-service compensation could exceed $850m]

NAB pays out additional $314m
mortgagebusiness

Latest News

The non-bank lender has launched an IPO at an offer price of $2.89 per share to raise $500.1 million. ...

The shareholders of the neobank have agreed to the scheme of arrangement that would see NAB acquire all the issued share capital in the comp...

ASIC has begun proceedings against the major bank for insider trading and breaches of its licensee obligations during the privatisation of A...

FROM THE WEB

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.