Australia and New Zealand Banking Group (ASX: ANZ) is being hit with $374 million of costs due to the Royal Commission.
ANZ Bank is one of Australia’s largest banks along with Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB).
The $374 million of costs:
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ANZ Bank said that its 2018 financial year cash profit will be impacted by $374 million of refunds to customers and related remediation costs due to customers “receiving inappropriate advice” according to the ASX release.
The above costs have been identified from the bank’s reviews to date and the reviews are ongoing.
Around 57% of the amount relates to customer refunds, which will impact revenue, whilst the remainder of remediation costs will be an expense.
ANZ Bank said it will split the total charge between continuing and discontinued operations due to the sale of some related subsidiaries.
Other costs:
ANZ also took the opportunity to announce a few other cost items including:
- $206 million relating to accelerated software amortisation
- $104 million of restructuring charges
- External legal costs of $55 million due to the Royal Commission
These additional charges will reduce ANZ’s ‘Common Equity Tier 1’ capital position by 10 basis points, or 0.1%.
The ANZ share price has fallen by 6.7% over the past year, according to Google Finance.
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