ANZ may have largely exited its wealth businesses but it has acknowledged $419 million in customer remediation costs plus external legal costs of $55 million to deal with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The remediation and Royal Commission costs were revealed as ANZ announced a 16 per cent decline in cash profit to $5,805 million translating to a statutory profit of $6,400 million, static with the big banking group’s 2017 full-year result
The directors declared a fully franked dividend of 160 cents per share.
Commenting on the result, ANZ chief executive, Shayne Elliott reinforced the value of “simplifying” the business.
“The actions taken in recent years to simplify our business have allowed us to reduce cost, rebalance capital and better remediate issues,” he said. “This places ANZ in a stronger position to meet the challenges facing the industry.”
The banking group’s announcement to the Australian Securities Exchange (ASX) confirmed the magnitude of restructure and substantial exit from wealth management in Australia and elsewhere, noting the sale of its OnePath pensions and investments and aligned dealer groups to IOOF and the sale of its life insurance business to Zurich.
In doing so, it stated that included in the 2018 loss from discontinued operations was a $632 million loss recognised on the reclassification of Wealth Australia businesses and customer remediation of $181 million for refunds to customers and related remediation costs.
It said these items primarily related to compensation to customers for receiving inappropriate advice or services not provided within the group’s former aligned dealer groups.
The ASX announcement noted that ANZ’s continuing Australian wealth operations included lenders mortgage insurance, share investing, financial planning and general insurance distribution.
