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Bank of Queensland refunds customers $35 million

Bank of Queensland (ASX: BOQ) announced today that it has completed a full review of its faulty operations and will be refunding customers around $34.5 million, while incurring an additional $11.5 million of remediation costs itself.

The trouble began when many of the bank’s products, processes, and systems were “flagged” late last year for misapplied interest rates and fees. Results from the review show that around 4% of the company’s customers are affected, with some errors originating as early as 2004. All refunds are expected to be completed by 2015.

Despite these unforeseen costs, Managing Director and CEO Stuart Grimshaw remains confident about the Bank’s future: “We have worked hard to address legacy issues and ensure the business is both robust and well positioned for future growth.”

The company is on track to meet all of its fiscal 2013 management targets expect retail asset growth, which is expected to miss its mark by around 20%. Profit before tax is predicted to clock in “at the top end” of analysts’ expected $339 million to $368 million range.

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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

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