In a statement to the ASX, the key elements behind the reduction in cash earnings include:
- Increased provisions for customer refunds associated with certain advice fees charged by the group’s salaried financial planners due to more detailed analysis going back to 2008. These include where advice services were not provided, as well as where Westpac has not been able to sufficiently verify that advice services were provided;
- Increased provisions for refunds to customers who may have received inadequate financial advice from Westpac planners;
- Additional provisions to resolve legacy issues as part of the group’s detailed product reviews;
- Provisions for costs of implementing the three remediation processes above; and
- Estimated provisions for recent litigation, including costs and penalties associated with the already disclosed responsible lending and BBSW cases.
As a guide, approximately two-thirds of the impact is expected to be recorded as negative revenue while the remainder will be recorded in costs, Westpac said.
Costs associated with responding to the royal commission are not included in these amounts.
Westpac said further details of the provisions/costs are still being finalised and will provide more information when it releases its full-year results in October.
It also said the program of reviews will continue into next year, which includes continuing to investigate and consider potential further costs associated with advice fees charged by its aligned planners.
“It is disappointing some of our past practices have not lived up to appropriate standards. We are committed to fixing any issue identified, as well as ensuring that any customer affected has not been disadvantaged,” said Westpac chief executive Brian Hartzer.
[quote=Anonymous]An admission of Guilt. Yet will ASIC suspend their license for a day NO. Fine them NO. I might just go and do a few burnouts in Martin Place and then make a similar announcement saying I’ve set aside $500 to hose off the rubber from the road. [/quote] NICE ANALOGY !!
The penalty for a breach of the best interests duty is $1,000,000 per breach.
Oh, I forgot.
The banks fund ASIC, so they are allowed to profit from their breaches, ie no breach report penalties, no disgorgement of profit, no remediation and no penalties.
That’s just the way things work in the world of Peter Kell and Tim Mullaly.
Don’t upset our friends at the bank,
It is disappointing some of our past practices have not lived up to appropriate standards.
WHAT back to 2008, disappointing that you as a licencee did not live up to appropriate standards of supervision for the past ten years!!!!
Which fee lever will compensate for this income loss
An admission of Guilt. Yet will ASIC suspend their license for a day NO. Fine them NO. I might just go and do a few burnouts in Martin Place and then make a similar announcement saying I’ve set aside $500 to hose off the rubber from the road.
I think a few alligned firms are in for some sleepless nights
Westpac about to get generous with their money refunding all service fees that can’t be proven to have had service provided
What does it take for a BIG$ (oops Big 4) to lose their licence?…..impossible!
A grovel worthy of Charles Dickens, Now perhaps it will be customers before shareholders. But for how long?