NAB chief executive Andrew Thorburn has admitted to a parliamentary committee that it has taken too long for the bank to identify and address issues relating to its wealth business.
Last week, NAB announced it would pay out more than $310 million after tax to customers as part of efforts to address advice-related issues.
It said the additional costs are due to refunds and compensation to customers impacted by issues in NAB’s wealth business, including adviser service fees and other wealth related issues.
Speaking at the parliamentary house committee inquiry into the major banks, Mr Thorburn acknowledged that “we’ve taken too long to find it and fix it”.
“Today, as I sit here, I feel we've resourced it and made the financial provision to be able to handle that as quickly as we can,” Mr Thorburn said.
“We've still got a lot of complexity to work through, but we are looking at $500 million that we've provided in total for this.”
Mr Thorburn also told the committee of the complexities around getting access to the necessary data and systems, given a number of the cases go back between five to 10 years.
“We want to get this as done as quickly as we can. I think we'll have made a lot of progress by the end of this year. I think the amount will be about $130 million that we'll have done by the end of the year,” he said.
“I think we want to complete the rest next year and as quickly as we can and the setting up of this customer remediation group that we've done since centrally.
“Both those things mean that we can push into it just as quick as we can.”
Committee member Matt Keogh asked NAB chief customer officer David Gall about the progress of its compensation payout to customers.
“That is still being worked through at the moment, so I would say that there would be a number with adviser service fees that haven't yet been informed,” Mr Gall said.
“However, we expect to have a significant amount of compensation on those customers paid by Christmas as well.”
Mr Keogh then asked Mr Gall when all customers will be paid.
“We're unable to answer that yet, but my expectation would be we're going to be into 2019,” Mr Gall said.
In addition, Mr Keogh asked why there are still delays in NAB even having an idea of when they might be able to pay all affected customers.
“It's a matter of actually working through them,” Mr Gall said.
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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