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Australia’s Westpac Group announced full year profits of just over AU$8.0 billion Monday, a one percent increase, as the fallout from the country’s banking sector scandals dented growth.
The Sydney based financial firm said legal payouts, consumer refunds and tweaked regulations stemming from an investigation into shoddy behavior in Australia’s banking sector cost the company hundreds of millions of dollars.
‘While the economic environment remains supportive, this result reflects the tough operating conditions for banks,’ said Westpac CEO, Brian Hartzer.
‘Legal costs were $281 million (US$202 million) after tax,’ the company said ‘as we continued to work through regulatory investigations, remediations, and putting things right for customers.’
A government-backed Royal Commission found in September that Australia’s ‘big four’ banking companies had committed widespread misconduct, including charging the dead for services, providing questionable financial and life insurance advice and mortgage fraud.
‘We have reinforced our values and service culture to all employees through additional training,’ Westpac said.
But the sector-wide problems masked specific troubles in the company’s BT Financial Group – its wealth management arm – which saw spiraling profits, and amid high spending as Westpac tries to improve its digital offerings to consumers.