Australia & New Zealand Bank (ASX: ANZ) will give wronged customers $559 million in compensation over the six month period to September 30 2019.
In the context of a NZ$1,114 million first half net profit this is a material amount, however, investors appear to have shrugged off the news as a one-off with the stock up 0.2% to $27.37 this morning.
How the flagged costs will impact cash flow over the period is unclear and the dividend siren is calling with the bank due to go ex-dividend in around one month's time.
Analysts still generally expect ANZ Bank to hand out a flat final fully franked dividend of 80 cents per share over the second half of fiscal 2019, although any nerves that that compensation costs could lower the dividend are likely to hurt the valuation.
ANZ Chief Financial Officer Michelle Jablko said: "We recognise the impact this has on both customers and shareholders. We are well progressed in fixing issues and have a dedicated team of more than 500 specialists working hard to get any money owed back to customers as quickly as possible."
Further down the line the bank left the door open to flagging more compensation costs which is another factor for investors to consider. Others having big regulatory problems recently include Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB).
