The National Australia Bank has announced that it will pay out over $310 million to customers impacted by its wealth business.
The cost of $314 million will reduce the 2018 cash earnings by an estimated $261 million and earnings from discontinued operations by an estimated $53 million.
These additional costs are due to refunds and compensation to customers impacted by issues in NAB’s Wealth business, including adviser service fees and other wealth related issues.
Further costs are due to implementing remediation processes and various costs associated with regulatory compliance matters.
NAB’s chief executive officer Andrew Thorburn said that the bank had let people down and wanted to refund affected customers as quickly as possible.
“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,” he said.
Of the cash earnings impact, approximately 69 per cent of these costs will impact revenue with the balance reported in expenses.
These additional costs will be excluded from the 2018 financial year expense growth guidance which also does not include costs associated with responding to the Royal Commission.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]