What do the big banks have in common? $1b+ remediation bills
Not one of Australia’s big four banks has had client remediation obligations of less than $1 billion over the past four years, according to data provided to Parliament by the Australian Securities and Investments Commission.
While admitting that it does not have comprehensive data on remediation programs conducted by the financial services industry and that it does not powers to direct licensees to conduct remediations within particular timeframes, ASIC pointed to the big four banks as indicators of what has been going on.
“The cumulative payments and provisioning for remediation in the latest financial reports by the largest institutions are reported as follows:
- As at 30 June 2021, CBA reported that $960 million of remediation has been paid to consumers since FY14 with a further $1.038 billion to be repaid.
- As at 30 September 2021, NAB reported that $1.290 billion of remediation has been paid to customers since June 2018 with a further $966 million to be repaid.
- As at 30 September 2021, Westpac reported that $1.5 billion of remediation has been paid to customers to date.
- As at 30 September 2021, ANZ reported that cumulative customer remediation post tax is $1.814 billion across continuing and discontinued operations since March 2017. ANZ reported that their balance sheet as at September 2021 includes provisions of $886 million for expected refunds to customers, program costs and related claims, penalties and litigation outcomes.
- As at 30 June 2021, AMP reported that $215 million has been paid or offered to customers for inappropriate advice and fees for no service since 2018 with a further $381 million to be repaid.
The ASIC response to questions asked during a hearing of the Parliamentary Joint Committee on Corporations and Financial Services said the regulator is currently monitoring 64 remediations across the financial system that should see the return of approximately $5.4 billion to over 5.6 million consumers upon finalisation.
“As at November 2021, $2.78 billion has been returned or offered to consumers and another $2.62 billion is still expected to be repaid. The data is compiled by ASIC from information provided by the financial firms or from publicly available information (which is limited). This information is not independently verified by ASIC.”
“While ASIC does have some regulatory tools available to address misconduct and poor remediation outcomes, ASIC does not have powers to direct licensees to conduct remediations within a particular timeframe.”