Provisions for customer payments in FY18 results

ASX
Release

27 September 2018

Westpac outlines further provisions for customer payments and related
costs to be incurred in its FY18 results
Westpac Banking Corporation has today announced that its Cash earnings in
Full Year 2018 will be reduced by an estimated $235 million following continued
work on addressing customer issues and from provisions related to recent
litigation. The key elements include:
• Increased provisions for customer refunds associated with certain advice
fees charged by the Group’s salaried financial planners due to more
detailed analysis going back to 2008. These include where advice
services were not provided, as well as where we have not been able to
sufficiently verify that advice services were provided;
• Increased provisions for refunds to customers who may have received
inadequate financial advice from Westpac planners;
• Additional provisions to resolve legacy issues as part of the Group’s
detailed product reviews;
• Provisions for costs of implementing the three remediation processes
above; and
• Estimated provisions for recent litigation, including costs and penalties
associated with the already disclosed responsible lending and BBSW
cases.
Details of the provisions/costs are still being finalised and the Group expects to
provide more information when it releases its Full Year 2018 Results template,
later in October 2018. As a guide, approximately two thirds of the impact is
expected to be recorded as negative revenue while the remainder will be
recorded in costs. Costs associated with responding to the Royal Commission
are not included in these amounts.

The program of reviews will continue into Full Year 2019. This includes
continuing to investigate and consider potential further costs associated with
advice fees charged by our aligned planners.
Westpac is scheduled to report its Full Year 2018 results on 5 November 2018.
Notwithstanding these new provisions, Westpac remains well placed to meet
APRA’s unquestionably strong capital benchmark.
Westpac first commenced its “get it right put it right” initiative in early 2017 to
address legacy issues in some products and practices. Westpac Chief
Executive Officer, Brian Hartzer said “It is disappointing some of our past
practices have not lived up to appropriate standards. We are committed to
fixing any issue identified, as well as ensuring that any customer affected has
not been disadvantaged.”
Ends...

For further information
David Lording
Media Relations
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Andrew Bowden
Investor Relations
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M. 0438 284 863