October 7, 2019 / 10:54 PM / in 5 months

Australia's ANZ flags $376 million hit to second-half 2019 profit from customer remediation

FILE PHOTO: An ANZ bank logo is pictured in Sydney, Australia April 23, 2018. REUTERS/Edgar Su

(Reuters) - Australia and New Zealand Banking Group (ANZ.AX) said its second-half 2019 cash profit will be affected by a charge of A$559 million ($376 million) due to increased provisions for customer-related remediation.

ANZ and its other “Big Four” banking peers have been facing regulatory pressure to repay customers for past wrongdoings that were brought to light by a powerful inquiry.

The cost of remediation has weighed heavily on earnings, with Australia’s fourth-largest lender by market capitalization resorting to scaling back costs in a bid to bump up its first-half profit.

ANZ said in a statement the charges relate to issues that have been identified from reviews to date and these reviews remain ongoing

Expenses related to remediation, as well as a generally weaker operating environment had seen Commonwealth Bank of Australia (CBA.AX), the country’s largest lender, disappointing investors with its annual profit in August.

Reporting by Ambar Warrick in Bengaluru; editing by Richard Pullin

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