The Commonwealth Bank’s arrangements around the sale of Count Financial to Countplus have become more expensive, with the bank lifting its remediation provisioning by $32 million.
Both the bank and Countplus announced to the Australian Securities Exchange (ASX) today that the remediation provision had been revised from $220 million up to $252 million, subject to an audit review.
However, they said this was within the $300 million limit of the indemnity provided by the Commonwealth Bank to CountPlus for “certain post and pre completion conduct of Count Financial arising from when Count Financial was owned by the Commonwealth Bank”.
At the time of the acquisition of Count Financial by CountPlus in October, 2019, the Commonwealth Bank provided an indemnity to cover remediation of certain conduct up to a maximum of $200 million.
In July, last year, CountPlus reported that it had entered into an agreement with the Commonwealth Bank to increase the limit of the indemnity to $300 million.
It said the potential for further increases to the indemnity limit remained subject to certain triggers relating to the failure rate for fee for no service remediation and the quantum of certain inappropriate advice remediation.