NAB to fork out another $1.19 billion on customer remediation
Written on the 2 October 2019 by Matt Ogg
National Australia Bank (ASX: NAB) shares are down 3 per cent in early trading after the lender announced additional charges of $1.19 billion for further customer-related remediation.
This takes the total remediation provisions to almost $2.1 billion as the bank seeks to rectify its reputation in the wake of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The money will be put aside for potential customer refunds of adviser service fees paid to self-employed advisers.
"NAB is moving forward with rigour and discipline to make things right for customers," says NAB chief executive officer Philip Chronican (pictured).
"While we previously noted additional customerrelated remediation provisions were expected in 2H19, the size of these provisions is significant. We understand that shareholders will be rightly disappointed.
"However, we also recognise the need to prioritise dealing with these past issues and fixing them for customers."
To date NAB has made 450,000 payments to customers with a total value of $202 million between June 2018 and August 2019, with a dedicated team of 400 people on the task.
The company has also changed the application of its software capitalisation policy, taking new charges to $1.68 billion before tax. Cash earnings are expected to be down $1.12 billion as a result.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg