July 29, 2020 / 11:36 PM / 11 days ago

UPDATE 1-Australian bank CBA sets aside $216 mln more to remediate customers

(Adds background on exit from aligned business, pandemic-related loan losses)

July 30 (Reuters) - Commonwealth Bank of Australia (CBA) said on Thursday it is making additional provisions of A$300 million ($215.67 million) in its annual results to remediate customers across its aligned advice businesses.

The country’s largest lender exited its aligned financial advice business last year after a government-backed inquiry into the financial sector in 2018 exposed widespread systematic misconduct, prompting CBA and its “Big Four” banking peers to incur hefty amounts to compensate customers.

CBA said in a statement total remediation provisions recognised to date now stands at A$834 million, which largely consists of customer refunds.

The coronavirus crisis has added further pressure on Australian banks, which now see margins threatened due to record-low interest rates, rising unemployment and more bad loans.

The Sydney-based lender had booked A$1.5 billion in provisions in the third quarter to cover future pandemic-related loan losses.

CBA is set to report its full year results on Aug. 12. ($1 = 1.3926 Australian dollars) (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Sandra Maler and Muralikumar Anantharaman)

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