Positive CBA update reveal remediation status
The Commonwealth Bank has revealed the state of its client remediation processes at the same time as using a first quarter trading update to reveal a 5% increase in unaudited net profit from continuing operations of approximately $2.3 billion.
The update, released to the Australian Securities Exchange, revealed the extent of the bank’s remediation issues and the progress made to date.
It said that of the $2.2 billion in total program spend and provisions, $1.2 billion related to customer refunds of which approximately $600 million had been paid to banking and wealth management customers to date (excluding aligned advice).
“Salaried adviser ongoing service remediation is now complete and represented a refund rate of 22% excluding interest,” it said.
“Aligned advice remediation work relating to ongoing service fees charged between 2009 and 2018 is continuing. The aligned advice remediation provision recognised in FY19 of $534 million included program costs of $160 million, $251 million in customer refunds and $123 million in interest.”
CBA chief executive said the bank remained well place in a challenging operating environment, characterised by global macro-economic uncertainty and historically low interest rates.
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