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Australia's NAB flags additional A$525m charge for customer refunds
[BENGALURU] National Australia Bank Ltd on Thursday flagged additional charges of A$525 million (S$509.5 million) after tax as the lender bulks up provisions to refund customers.
Melbourne-based National Australia Bank now estimates a A$325 million hit to cash earnings for the first half of this year as a result of the increased provisions.
"We are putting things right where we have treated our customers poorly and making sure that they are compensated more quickly," NAB's chief executive officer, Philip Chronican said in a statement.
Mr Chronican said there were around 350 employees dedicated to remediating customers, and that is expected to rise to around 500.
The Australian Securities and Investments Commission (ASIC) rebuked the biggest banks and financial services firms in March for delays in fixing internal systems that resulted in customers paying fees for services they had not received, in the wake of an inquiry into financial sector wrongdoing.
NAB's move follows other major lenders who have taken similar steps to refurbish wronged customers.
Australia's Westpac Banking Corp, one of the "Big Four" lenders in Australia, in March warned that its first-half cash earnings would fall about A$260 million on account of provisions for customer refunds.
Similarly, Commonwealth Bank of Australia also announced similar refund measures last year.