ANZ (ASX:ANZ) - CEO, Shayne Elliot
CEO, Shayne Elliot
Source: Sydney Morning Herald
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  • ANZ (ANZ) has forecast a $528 million hit to its bottom line and increased customer remediation charges ahead of its second half-year report of 2020
  • Customer remediation costs in the second half of 2020 more than doubled to $188 million, compared to just $91 million in the preceding period
  • ANZ attributed the marked rise to in customer payouts to an acceleration of remediation programs and product reviews across its operations
  • Costs associated with ANZ’s operations in the Pacific region, as well as $138 million in write-downs on its software assets, also contributed to the $528 million in charges
  • ANZ opened 2.67 per cent in the red, trading for $18.98

ANZ (ANZ) has forecast a $528 million hit to its bottom line and increased customer remediation charges ahead of its second half-year report of 2020.

The big four bank more than doubled its customer remediation in the second half of 2020 to $188 million, compared to just $91 million in the preceding period.

ANZ attributed the rise in customer payouts to an acceleration in remediation programs and product reviews across its operations.

Like many of Australia’s banking institutions, ANZ has been eager to reassess its own products and customer issues as ripples from last year’s Hayne Royal Commission and AUSTRAC’s recent slew of legal actions continue to place the sector under the microscope.

Customer remediation isn’t the only big hit in ANZ’s upcoming finical figures. The bank also noted $138 million write-down associated with its operating software, stating the costs “reflect the increasingly shorter useful life of various types of software assets caused by rapidly changing technology and business requirements.”

The remaining $202 million in after tax charges were attributed to a mix of write-downs and goodwill from ANZ’s operations in the Pacific.  

Despite the $528 million impact to its half-year cash profit, the bank doesn’t expect this to significantly hamper its stability, as the charges only accounts for around a five-base point, or a 0.05 per cent, variation on its common equity tier one capital.

Further, even with the increased remediation and software charges, the half a billion in associated costs is a marked improvement on ANZ first half-year tally of more than $1 billion.

The blow out in the first half of the year was largely attributed to $815 million in impairments from the company’s Asian assets, which were severely hit earlier this year at the onset of the COVID-19 pandemic.

ANZ opened 2.67 per cent in the red, trading for $18.98 at 10:58 am AEDT.

ANZ by the numbers
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