Westpac Joins NAB In Warning On Earnings Blow

By Glenn Dyer | More Articles by Glenn Dyer

Westpac has joined the National Australia Bank in revealing pre-result, one-off losses, and other costs of more than a billion dollars.

In the case of the NAB, it was more than $600 million for the second half to September 30 – Westpac on Monday revealed a bill of $1.2 billion.

Both NAB and Westpac are due to reveal their results next week after the ANZ kicks off the mini-reporting season on Thursday.

The bank said its life insurance business would be written down by $406 million and the group’s disability insurance business would report a loss of $260 million, ahead of the results announcement next Monday.

As well there are the extra costs related to the landmark legal case over anti-money laundering law breaches and the $1.3 billion fine (most of which has been already provisioned $900 million of the estimated cost and said it would add to that provision in its full-year result).

The losses were partly offset by an increased valuation of its holding of buy now, pay later platform Zip Co by $303 million, which became effective before the bank sold the shares last week for $367 million after linking with rival Afterpay.

Westpac has also put aside an additional $182 million to compensate customers who were sold incorrect loans, overcharged or were provided poor advice. As part of this increased provision, $104 million will pay for running the remediation program and $38 million will be used pay pay for settling legal disputes with customers.

Westpac shares rose 0.4% to $18.70.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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