Bank remediation payment bill soars to $3.15bn in 2021: ASIC data

The bill for bad behaviour at Australia’s major banks surges 69 per cent to $3.15bn, according to the corporate watchdog.

New data from corporate regulator ASIC finds NAB has or will pay the highest remediation bill of any of the big banks for failures. Picture: John Gass/NCA NewsWire

Six big banks have significantly increased compensation paid or offered to customers for bad behaviour, topping $3.15bn by the end of 2021, according to new figures from the corporate regulator.

The data, compiled by the Australian Securities and Investments Commission, found National Australia Bank had offered the largest compensation of the major banks to its customers.

AMP, ANZ, Commonwealth Bank, NAB, and Westpac were all pinged in the wake of two ASIC reviews into non-compliant financial advice and fees for no service.

One review found AMP, ANZ, CBA, Westpac, and NAB improperly identified and dealt with non-compliant advice by financial advisers between 2009 and 2015.

Another review found AMP, ANZ, CBA and NAB, as well as some of their product issuers, had charged customers fees for services they never received.

Remediation bills have been steadily climbing in the wake of ASIC’s reviews.

By mid-2021, ASIC pegged the total at $1.86bn offered or paid to customers. However, that has since soared by 69 per cent to $3.15bn by December in the wake of further efforts by big banks to grapple with the breadth of failures.

In total, more than 1.3 million Australians are affected by the bank failures and covered by the remediation schemes.

However, ASIC notes the banks do not hold consistent data for people affected and some people may be double counted.

These investigations have seen some banks stung on customer remediation sums, ballooning from earlier expected levels.

NAB saw its compensation levels for fees for no service more than double to $1.1m by December, while Westpac’s rose to $894m.

In addition to its payouts for non complaint advice, NAB has disclosed total remediation costs of at least $1.21bn, expected to be completed by October.

That compared to Westpac’s total payouts of around $956.39m, set to wrap up next month.

Financial services group AMP, which was hammered for its role in the banking scandal, is set to pay or has offered customers $649m in remediation payments set to conclude in the first quarter of this year.

CBA is up for $218.5m in payments to customers for fees for no service and non-compliant advice from its financial planning businesses.

Payments to CBA customers are set to be the slowest of all the big banks, only expected to conclude in December.

This was followed by ANZ which has disclosed total compensation offered or paid of around $169m and Macquarie with just $4.6m.

Macquarie has concluded making remediation payments to customers, while ANZ is set to wrap up its scheme by July.