Westpac Takes A$260 Million Earnings Hit to Compensate Customers

(Bloomberg) -- Westpac Banking Corp. will take a A$260 million ($184 million) hit to first-half cash earnings to compensate customers for poor financial advice, pushing its total remediation bill past A$650 million.

The cost could climb further, with the bank still reviewing further cases where customers may have been charged for services they didn’t receive.

“As part of our ‘get it right put it right’ initiative we are determined to fix these issues and stop these errors occurring again,” Chief Executive Officer Brian Hartzer said in a statement Monday. “We will continue to review our products and services to ensure they deliver the right outcomes for customers, and if necessary, make further provisions.”

The Sydney-based bank last week said it will stop providing personal financial advice as part of an overhaul of its wealth business. The move came after an inquiry into misconduct in the financial sector unearthed a string of scandals at the big-four banks’ advice units, from charging fees for no service to pushing people into poorly-performing products to meet bonus targets.

To contact the reporter on this story: Peter Vercoe in Sydney at pvercoe@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Edward Johnson

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