NAB says that an additional charge of $525 million after tax ($749 million before tax) relating to its customer remediation programme. As a result 1H19 cash earnings will drop by around $325 million and earning from discontinued operations by $200 million.
They say they have made around 360,000 payments to customers with a total valuer of $145 million, and the remediation team is building from 350 to around 500 across NAB.
Of the 1H19 charges, 90% relate to wealth, the remainder banking. IN combination with provisions raised in 2H18, total provisions for customer related remediation to 31 Match 2019 is $1,102 million.
The items responsible for this include:
- Consumer credit insurance
- Non-compliant advice to wealth customers
- Adviser service fees by NAB advice partnerships (does not include allowance for customer refunds)
- Adviser service fees charged by NAB Financial Planning
- Banking related matters such as incorrect fee take on fee expect transactions.
These costs are to be held below the line as it were, but clearly investors and potentially customers will have to pay for this litany of poor practice.
It begs the question, can the NAB behaviourial norms be turned around? And at what cost?
