ANZ Earmarks $374 Million for Advice Remediation

ANZ will set aside $374 million to compensate customers who received inappropriate advice or for services not provided, including for advice provided by the advice businesses it sold to IOOF.

The bank made the announcement to the ASX, ahead of the release of its full year results on 31 October, providing notice that the results would be impacted by the compensation figures.

The announcement stated the compensation charges had been recognised in the second half year of its results and related to advice customers and related remediation costs which had been identified in completed reviews. The announcement also stated “…these reviews remain ongoing”.

“Approximately 57 per cent relates to customer refunds impacting revenue, with the balance relating to remediation costs recorded as an expense,” ANZ stated.

The announcement added that key areas of remediation would include “…compensating customers for issues arising from product reviews in the Australia Division” and “…compensation for customers receiving inappropriate advice or for services not provided within ANZ’s former aligned dealer groups”.

“The total remediation charge is split approximately 66%/34% between Continuing and Discontinued operations,” the announcement noted, adding the sale of its former non-bank advice businesses to IOOF was completed on 1 October.

The bank also flagged that its costs related to the Financial Services Royal Commission would also be included as cost under the full year results, and that it has spent $55 million on external legal costs associated with responding to the Royal Commission.