NAB sets aside $314m for customer compensation
Written on the 16 October 2018 by David Simmons
NAB (ASX: NAB) is the latest bank to set aside a large swathe of cash to compensate its customers.
In total, NAB will set aside $314 million for refunds and compensation for issues including adviser services fees and plan service fees.
As part of the compensation, $53 million is related to discontinued operations.
The costs associated with responding to the multitude of problems uncovered during the Royal Commission into the banking and finance sector are not included in the lump sum.
The charges will be the last for NAB in the 2018 financial year (to be reported on 1 November), but NAB's chief executive Andrew Thorburn says there will be more to come.
"Where we have let customers down, we are determined to put things right," says Thorburn.
"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."
Approximately 69 per cent of the cash earnings hit will affect revenue, with the remainder reported in expenses.
NAB's hit follows the setting aside of cash from other major Australian banks for customer compensation.
ANZ last week outlined $421 million in remediation costs, while Westpac has set aside $235 million a figure that is expected to increase.
Commonwealth Bank last week announced a remediation program for deceased estates but has not yet revealed the cost of the program.
Shares in NAB are up 1.18 per cent to $25.80 per share at 11.06am AEST.
Business News Australia
Author: David Simmons