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