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IOOF Holdings cuts dividend, makes remediation provisions after external review

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IOOF Holdings cuts dividend, makes remediation provisions after external review

IOOF Holdings Ltd. cut its dividend for the fiscal year ended June 30 and said it has provisioned for A$182.7 million in remediation costs for fees-for-no-service cases and A$40.4 million in program costs after conducting an external advice review.

The company said Aug. 26 that its board declared total fully franked dividend for the half year of 19 cents per share, which includes a final dividend of 12 cents per share and a special dividend of 7 cents per share. The fiscal second-half dividend takes the total dividend for the fiscal year to 44.5 cents per share, down from 54 cents per share for the prior fiscal year.

Meanwhile, IOOF said its review found incidences of fees for no service, inadequate documentation and inappropriate advice. The review included the development of key risk indicators, a sampling of advisers and an external review of over 1,200 files.

The company reported fiscal second-half statutory net profit after tax of A$28.6 million, down 67.7% from A$88.3 million in the year-ago period. Its underlying net profit after tax from continuing operations rose to A$198 million from A$191.4 million.

CEO Renato Mota said IOOF is focused on stabilizing the business in one of the most challenging years for the company and for the industry. "The industry is in a state of flux," Mota said. "It is working towards restoring trust and there is strategic disruption. These things take time and hard choices need to be made to appropriately set the path for better outcomes."