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National Australia Bank customer remediation costs to hurt fiscal H2 profit

National Australia Bank Ltd. expects reduced profit for the fiscal second half ended September due to additional costs worth A$314 million after tax, in relation to its customer remediation program.

The bank said Oct. 16 that the additional costs will cut its second-half cash earnings by an estimated A$261 million and earnings from discontinued operations by an estimated A$53 million.

The extra costs are related to customer compensation arising from the bank's wealth business, as well as costs for implementing the remediation process and other regulatory compliance expenses.

NAB said about 69% of the remediation costs will affect its revenue, while the remaining 31% will be reported as expenses.

The Australian lender is expected to release its full-year results Nov. 1.