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NAB to record A$1.18B of charges on customer remediation, software change

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NAB to record A$1.18B of charges on customer remediation, software change

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.