ANZ shares fall after flagging profit to take $824m hit on customer compensation and other costs

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ASX:ANZ

The Australia and New Zealand Banking Group (ASX:ANZ) share price has fallen 50 cents or 1.8 per cent to $27.22 after the bank flagged an $824 million hit to its full-year profit due to impairments and one-off expenses, more than half of it related to customer remediation.

The lender, which will announce its results on October 31, says the $421 million in post-tax remediation costs covers customers charged fees for no service, inappropriate financial advice and other issues uncovered from product reviews.

“These relate to issues that have been identified from reviews to date,” ANZ said in a statement.

“These reviews remain ongoing.”

The remediation includes $127 million for businesses recently sold to IOOF, while other items include $159 million in restructuring costs and $38 million in royal commission legal costs.

The unaudited hit flagged on Monday is weighted toward the second half, with $711 million to be recorded in the six months to September 30.

Rival Westpac last month already warned its full-year cash earnings would take a $235 million hit due to a provision for customer compensation and litigation.

ANZ shares have fallen 7 per cent in the past 12 months compared to a gain of 7.5 per cent in the ASX 200 index over the same period.

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Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
Lauren Surplice is a keen follower of the stock market, investing in individual companies and funds. She follows the daily stock market news, covering the ASX stocks that are moving the markets. You can contact Lauren at laurens@thecapitalclub.com.au