The bank has flagged huge provisions for remediating its wealth customers and payroll errors that cost employees millions ahead of its full-year earnings.
NAB has announced a net increase of $380 million for customer-related remediation, of which $245 million is for wealth-related matters while $135 million is for banking-related matters. There has also been a net increase in payroll remediation provisions of $128 million, while the bank expects an impairment charge of $134 million for property-related assets.
Wealth-related charges stem from non-compliant advice given to wealth customers, along with adviser service fees charged by NAB Financial Planning. There has also been a general increase for ongoing liabilities associated with parts of the existing wealth remediation program that NAB retains responsibility for following the sale of MLC to IOOF. The charges will reduce NAB’s common equity tier 1 capital ratio by around 15 bps.
All earnings associated with MLC will also transfer to discontinued operations from 2H20.