BUSINESS Stock dives as ANZ tips huge profit hit
ANZ shares have taken their steepest one- day fall in more than eight months after the group warned it would take a painful hit at its full- year results.
And shares in its major rivals have also slipped after the banking heavyweight flagged more than $ 800 million in impairments and other one- off expenses, intensifying the pall over the sector.
In a trading update yesterday, ANZ said it would take an $ 824 million hit to its full- year profit when it released its results late this month.
Of that sum, $ 421 million is the cost for “remediation” – or compensation – for customers who have been victims of misconduct or mistakes at the bank.
ANZ is among financial companies ensnared in the widespread “fees for no service” scandal.
In a statement yesterday, the bank said it was compensating customers who received “inappropriate advice” or who paid for services they did not receive.
The bank said it was also compensating customers “for issues arising from product reviews”, but did not specify the products in question.
Of the $ 421 million, $ 240 million is going to customers and $ 181 million is the sum the bank spent finding out which customers were affected by poor practices.
The bank, led by chief executive Shayne Elliott, said efforts to repay customers might not be complete.
“These ( costs) relate to issues that have been identified from reviews to date,” it said in a statement. “These reviews remain ongoing.”
ANZ’s shares fell 2.6 per cent yesterday in their biggest single- session slide since February.
The drop wiped more than $ 2 billion from the group’s market value, cutting it to $ 77.6 billion.
Shares in the other big banks also fell yesterday, between 0.9 per cent and 1.3 per cent.
ANZ is scheduled to an- nounce its full- year results on October 31.
Among other one- off costs flagged by ANZ yesterday, it is also taking a $ 38 million hit for costs associated with the financial services royal commission.
The bank is writing down the value of some software assets, mostly linked to its international business.
It said a $ 206 million “accelerated” software amortisation expense – essentially the cost for ageing software – would be recorded in the second half of this year.