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Oct 23 (Reuters) - Australia’s No. 2 lender Westpac Banking Corp on Wednesday said its cash earnings in the second half of 2019 would be reduced by about A$341 million ($233 million) due to customer remediation programmes.
The provisions for customer remediation comes in the wake of a powerful government mandated inquiry into Australia’s financial sector, which found rampant misconduct among top institutions.
Besides the charges relating to customer remediation programmes, costs related to the previously announced wealth reset will reduce second-half earnings by another A$36 million, the lender said in a statement.
“A key priority in 2019 has been to deal with outstanding remediation issues and refund customers as quickly as possible,” said Westpac Chief Executive Officer Brian Hartzer.
The fallout from the inquiry has also hurt other top lenders, with No. 3 National Australia Bank and No. 4 Australia and New Zealand Bank Banking Group flagging hits to profit related to remediation costs.
Westpac is scheduled to report its full-year financials on Nov. 4.
$1 = 1.4626 Australian dollars Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Tom Hogue