CBA remediation nearly done. What now for Count stake?

The Commonwealth Bank has finally reached the tail-end of its client remediation process declaring that it has just $276 million remaining to pay affected customers, after having already paid out over $2.2 billion.

And as the bank closes out its remediation program, it will likely be considering the future of its 36% holding in Count dating back to its sale of the business to CountPlus which included indemnities which were lifted to $520 million in December, last year.

The bank’s full-year results, announced to the Australian Securities Exchange (ASX) places the total cost of the remediation at $3.974 billion which the majority attributable to aligned advice ($1.175 billion) and wealth ($704 million.

CBA said the aligned advice remediation was primarily associated with ongoing service fees where no service was provided, while wealth related to “advice quality” around consumer credit insurance products, certain superannuation and other products.

The bank’s documentation said that its divestments, including that of Count Financial in October 2019 had returned $9 billion to shareholders to date but it made no specific mention of its remaining stake in the business.

When the Commonwealth Bank announced sale of Count Financial to Countplus in 2019 for $2.5 million it referenced an indemnity of $200 million.

A the time of the transaction, the bank said it owned a 35.9% shareholding in CountPlus and intended, subject to market conditions, to sell its shareholding in an orderly manner over time.

The Commonwealth Bank announced a 5% increase in net profit after tax to $10.188 billion and a final dividend of $2.40 per share translating into a total dividend of $4.50 per share fully-franked.

The bank’s chief executive, Matt Comyn said the results demonstrated the bank’s continued focus on supporting its customers through an increasingly challenging period.