The Australia and New Zealand Banking Group (ASX: ANZ) share price has been on the move today following an update on its customer remediation.
In afternoon trade the banking giant's shares are up 0.5% to $27.45.
What did ANZ announce?
This morning ANZ announced that its second half FY 2019 cash profit will be impacted by a charge of $559 million after tax as a result of increased provisions for customer-related remediation.
From its continuing operations, remediation charges recognised in the second half will be $405 million after tax. This is largely in relation to product reviews in Australia Retail & Commercial for fee and interest calculation and related matters. The release explains that these include historical matters recently identified, as well as refinements to estimates of existing customer compensation programs and associated costs.
From its discontinued operations, remediation charges recognised in the second half will be $154 million after tax. This is primarily associated with the advice remediation program and customer compensation charges for other Wealth products. In total, these new charges bring the bank's full year customer remediation charges to $682 million in FY 2019.
However, this may not be the end of the matter. The bank advised that the charges relate to issues that have been identified from reviews to date and these reviews remain ongoing.
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."
Should you still invest?
These charges certainly weren't as bad as those announced last week by National Australia Bank Ltd (ASX: NAB), but they are disappointing nonetheless.
However, I feel a lot of this was already priced into its share price, hence why there has been next to no reaction by the market today.
Overall, I would still be a buyer of its shares today, especially if I were an income investors in search of dividends. ANZ's shares currently provide a 5.8% dividend yield, which is notably higher than the market average.
