National Australia Bank Ltd. will book an additional A$1.18 billion of after-tax charges for its fiscal second half results ended Sept. 30, on the back of higher provisions for customer compensation and software changes.
The bank said Oct. 2 that the charges are expected to cut its cash earnings for the period by about A$1.12 billion, as well as its earnings from discontinued operations by about A$57 million.
The lender is expected to record A$832 million worth of after-tax charges for additional customer-related remediation, which includes a provision for potential customer refunds of adviser service fees paid to self-employed advisers.
NAB said 92% of the remediation charges were for wealth or insurance.
Further, the bank's fiscal second-half cash earnings is expected to be reduced by A$348 million after it raised its minimum threshold at which software is to be capitalized to A$2 million from A$500,000. The move comes after a review of its software capitalization policies.
The bank is expected to release its full-year results Nov. 7.
