Westpac’s first-half profit will take a $260 million hit from refunding customers in its financial advice, consumer and business banking arms, and it has signalled this will not be the end of its compensation costs.
The banking giant on Monday said its first-half results, to be delivered in early May, will include a $260 million provision for customer remediation, with about 90 per cent of the costs relating to problems from previous financial years.
About half the costs relate to its financial advice business, which the bank last week said it would sell, and the remainder are for issues in its consumer and business banking divisions.
The update said these payouts did not include compensation for the “authorised representatives” in its financial advice division — self-employed advisers who operated under the bank’s financial services licence — because of difficulty in accessing the necessary files.
The bank said it would be assessing provisioning requirements for its authorised representatives as part of its first-half results.
“A key priority is to deal with outstanding remediation issues and refund customers as quickly as possible,” chief executive Brian Hartzer said.
“As part of our ‘get it right, put it right’ initiative, we are determined to fix these issues and stop these errors occurring again. We will continue to review our products and services to ensure they deliver the right outcomes for customers, and if necessary, make further provisions.”
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