March 24, 2019 / 10:35 PM / 3 months ago

UPDATE 1-Australia's Westpac flags $184 mln earnings hit from customer refunds

(Adds CEO comment, background)

March 25 (Reuters) - Australia’s Westpac Banking Corp said on Monday its first-half cash earnings would fall about A$260 million ($184.03 million) on account of provisions for customer refunds in the wake of an inquiry into financial sector wrongdoing.

About half of the provisions relate to the lender’s financial advice business while the remainder relates to its business and consumer banking unit, Westpac said in a statement.

“A key priority is to deal with outstanding remediation issues and refund customers as quickly as possible,” Australia’s second-largest lender’s Chief Executive Brian Hartzer said.

“As part of our ‘get it right put it right’ initiative we are determined to fix these issues and stop these errors occurring again,” he added.

Earlier this month, the bank said it would exit its financial advice business, the last of Australia’s top four banks to do so, as regulators pile pressure on the scandal-ridden financial sector to act in customers’ best interests.

The exit came after a year-long inquiry into the financial sector that exposed a culture of greed and systematic wrongdoing at Australia’s top financial firms, increasing regulatory scrutiny.

Westpac is slated to report its first-half 2019 results on May 6.

The lender set aside A$281 million for customer remediation in full-year 2018. ($1 = 1.4128 Australian dollars) (Reporting by Aditya Soni in Bengaluru; Editing by Chris Reese)

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