National Australia Bank (NAB) has upgraded the cost of financial planning client remediation.
The big banking group has announced to the Australian Securities Exchange (ASX) additional charges of $525 million after tax in connection with increased provisions for its remediation program.
It said it expected that this would reduce first half cash earnings by an estimated $325 million and earnings from discontinued operations by an estimated $200 million.
Confirming the situation, NAB chief executive, Philip Chronican said the company was putting things right where it had treated customers poorly and making sure they were compensated more quickly.
The bank said the key items giving rise to the increased costs were consumer credit insurance sales, non-compliant advice provided to wealth customers, adviser service fees charged by NAB Financial Planning salaried advisers, adviser fees charged by NAB Advise Partnership self-employed advisers and banking related matters including provisions for incorrectly charging fees on certain fee-exempt transactions.
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