Westpac remains positive despite remediation drag
Westpac has managed to keep its full-year result in the black, albeit marginally, reporting a one per cent increase in net profit to $8,095 million in what its chief executive, Brian Hartzer described as a difficult year.
Like the other major banks, Westpac had to carry the burden of remediation costs, explaining that it had booked full-year provisions of $380 million for estimated customer refunds, payments and associated costs.
The remediation costs weighed most heavily on BT Financial Group where cash earnings were down 12 per cent.
The directors declared a final fully franked dividend of 94 cents per share.
It said the provisions covered matters including certain advice fees associated with the group’s salaried financial planners, including where inadequate advice was provided, incidences where advice services were not provided, or where it had not been possible to verify if the advice services were provided.
It said additional provisions were put in place to resolve legacy product issues and costs associated with litigation.
The full-year results revealed that BT Financial Group suffered a decrease of 12 per cent in cash earnings to $645 million.
It said that while the division recorded higher insurance income from higher premiums and lower claims, and a stronger contribution from private wealth, this had been offset by higher provisions for estimated customer refunds and payments.
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