Commonwealth Bank (ASX:CBA) makes new $300 million provision for remediation

Company News

by Rachael Jones

Commonwealth Bank (ASX:CBA) has announced a new $300 million provision being made to pay remediation to customers for problematic financial advice highlighted by the Hayne royal commission, including charging fees for no service and providing inappropriate advice.

The total to-date Aligned Advice remediation provision recognised is $834 million, which includes $698 million in customer refunds (including $280 million of interest) and $136 million in program costs.

The provision assumes an average refund rate of 37 per cent (excluding interest) of the ongoing service fees collected between FY09 and FY19 (61 per cent including interest).

Shares in Commonwealth Bank (ASX:CBA) are trading 0.4 per cent higher at $73.31
 

Rachael Jones

Finance News Network
Rachael comes to FNN after working for Fairfax Media covering international breaking news, including the global economy and politics. She joined FNN in February 2018. She has reported on Australia’s finance news for various organisations since 2000 and has also interviewed a number of key business players, including Bill Gates. Rachael has also worked across a number of countries, including the UK and the US.