National Australia Bank’s first-half result will be rocked by a $1.14 billion triple hit of extra charges and writedowns even before coronavirus impacts are factored in.

The big four lender on Monday flagged a hefty $742 million blow through software capitalisation changes and an $188 million increase in refunds related to its fee-for-no-service scandal.

NAB will also cop a $214 million writedown against its 20 per cent investment in wealth manager MLC amid a “challenging operating environment”.

The bank in a release to the ASX warned of the potential impact of the coronavirus pandemic but did not offer specifics, or whether it would follow APRA’s advice on deferring the payment of an interim dividend.

Further detail will be provided when newly instated chief executive Ross McEwan hands down the bank’s 2020 half-year results on May 7.

NAB said the biggest blow to cash earnings would come from changes made to increase the minimum threshold at which software was to be capitalised, from $2 million to $5 million.

This is expected to reduce NAB’s capitalised software balance at March 31 by $1.06 billion and first-half cash earnings by $742 million after tax.

The amortisation saving in 2H20 is forecast at $154 million but this is expected to be broadly offset by investment expenses previously capitalised.

Last week rival lender Westpac tabled $1.43 million in expected first-half writedowns and provisions, including a potential $900 million penalty for its alleged money laundering and child exploitation scandal.

Westpac will also hold off announcing its decision on first-half dividends at its first-half results.

APRA earlier this month asked banks to conserve capital and reduce dividends, given the uncertain economic outlook.

This would ensure banks could continue to lend and underwrite insurance.

Meanwhile, NAB said it expects to increase its customer remediation program by $188 million five months after it said it had covered all legacy charges relating to past misdeeds.

NAB in November had provisioned a total $2.1 billion to right issues such as fees for no service and mis-sold credit card insurance, though interim chief executive Phil Chronican did not rule out more costs in the future.

Provisions for adviser service fees charged by NAB Financial Planning have now been increased to reflect a refund rate of 56 per cent including interest costs compared with 28 per cent as at September 30.

The net increase in the provision for remediation is expected to reduce the bank’s Common Equity Tier 1 capital ratio by about six basis points.

The bank said a “challenging operating environment within the life insurance industry” had resulted in a decline in the carrying value of NAB’s 20 per cent investment in MLC Life since September 2019.

This will result in an impairment loss of $214 million both before and after tax represents a 37 per cent reduction in the carrying value of this investment.

NAB in February narrowly beat first quarter profit expectations, even though its flat result was weighed down by record-low interest rates and an uptick in tech and investment costs.

The bank in November cut its final dividend after its full-year profit dropped 10.6 per cent to $5.1 billion, dragged down by its retail and wealth unit along with $1.1 billion in remediation provisions.

NAB shares were worth $16.39 before trade on Monday and have fallen by about a third in 2020 against an 18 per cent market downturn.