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The Managing Director of the National Australia Bank, Mr John Stewart, today announced the full impact of remedial measures for reimbursing customers for over-charging of fees on a range of financial packages, as well as updating initial estimates in relation to over-charging of Bank Account Debits tax. This was initially announced at the half year results in May 2005.
These issues date back several years. Incorrect collection of Debits tax may date back to 1982 when the tax was first introduced, while overcharging on package fees may date back to 1994, when the first package was launched. Mr Stewart said quantifying the total cost of reimbursements involved an extensive analysis of our records. The estimated total overcharging for both the package fees and Bank Account Debits tax amounts to approximately A$62 million before tax. This consists of an estimated A$10 million for Debits tax, and A$52 million for package fees that will be reimbursed.
In addition, NAB will reimburse customers approximately A$18 million in interest. This consists of approximately A$4 million for Debits tax, and A$14 million for package fees.
NAB will also set aside A$30 million to cover remedial activities and contingencies.
"A charge of A$7 million after tax for the Bank Accounts Debit tax was taken in the first half accounts. A further A$66 million after tax charge will be taken in the second half of the 2004-2005 financial year for estimated refunds and necessary remedial work," he said.
Mr Stewart also reconfirmed guidance provided at the half year results in May that: "Assuming there are no external shocks or further changes to regulatory capital, the Board would expect to pay a second half dividend of 83 cents franked to 80 per cent."
For further information:
Samantha Evans
Group Corporate Affairs
Tel: 03 8641 4982
Mobile: 0404 883 509
Hany Messieh
Manager
Investor Relations
Tel: 03 8641 2312
Mobile: 0414 446 876
A more detailed media release and additional background information on these issues can be found on the web site for our Australian businesses at www.nab.com.au or visit the web site for the corporate headquarters www.nabgroup.com.
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