National Australia Bank said on Friday its second half cash earnings will take a A$264 million ($188 million) hit from provisions for customer and payroll remediation and an impairment of property assets.
The charges will reduce net profit by A$450 million, with NAB's decision to offload MLC Wealth, the wealth unit it is selling to IOOF Holdings, trimming the cash earnings hit.
NAB said around 65% of A$266 million after tax set aside for customer remediation is linked to MLC Wealth. Another A$90 million has been set aside for payroll, including long-term overpayment and underpayment issues. An A$94 million impairment charge for property assets takes into account changes linked to more employees working remotely.
Cash earnings is a closely watched measure of performance for banks as it strips out unusual items.
Australia's No.3 lender said the provisions and impairment costs will reduce the bank's common equity tier 1 (CET1) ratio by 15 basis points.
The bank is due to report full year results on November 5.
($1 = 1.4033 Australian dollars)
(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Muralikumar Anantharaman and Jane Wardell)
