In its full-year results presentation for 2021, CBA revealed it had spent $3.2 billion on remediation over the course of the last 12 months, with $960 million in refunds returned to customers and around $1.04 billion yet to be refunded.
A further $1.2 billion had been allocated to costs associated with the remediation program, the bank said.
In a breakdown of attributable costs for the year’s remediation efforts, CBA said almost $900 million of the approximately $2 billion in refunds due to customers stemmed from its previous aligned advice channels including Count Financial and Financial Wisdom.
In a further update Countplus, who purchased Count from the bank in 2019, said it had increased its historic remediation provision to $260 million, which the group said was within the $300 million indemnity limit provided by CBA as a condition of the sale.
Around $615 million in refunds stemmed from its salaried advice business and insurance brands, with a further $491 million from banking.
Of the $1.2 billion in estimated fees received by its aligned advisers from 2009 to 2019, CBA said it had refunded approximately 39 per cent. Meanwhile, of the $500 million received by salaried advisers in the same period, the bank had refunded approximately 22 per cent.
The news came as CBA reported an almost 20 per cent increase in cash profits for the 2021 year to $8.7 billion.
The bank announced it would conduct a $6 billion buy-back from shareholders off the back of recording capital levels significantly above the highest standard required by APRA.
Why would you want to be an Adviser right now, the money is in Case Assessors doing remediation work. All you need to do is rule in the clients favor and you’re in the money.
The total industry bill is eye watering.
Looks like the only winner here are the auditors. The costs of the remediation are quite large.
Many clients are big winners too. They are receiving “fees for no service” refunds, for service that was actually provided. Most of these remediation payments are due to PR driven brand management and compliance bureaucracy, not genuine client disadvantage.