Commonwealth Bank's overall remediation and compliance costs have hit $2.2 billion, dragging its full-year June 2019 results.
A large chunk ($806m) of the bank's customer remediation bill will go towards implementing regulatory and compliance initiatives, including recommendations from the financial services Royal Commission, CBA announced to the ASX this morning.
Its cumulative spend and provision on rectifying errors further breaks down to: aligned advice ($534m), wealth ($459m) and banking ($375m).
Consequently, remediation costs have increased operating expenses by 2.5%, taking the group's statutory net profit after tax to $8.57 billion, which is down 8% year on year.
The remediation provision also reflect IT and wages costs incurred. During the year, CBA increased its risk and compliance staff to 600. It has also hired additional staff to work on remediation.
Overall, CBA employed 42,921 people as at FY19, about 459 more than the prior year.
CBA recently faced mounting pressure to come clean as to the extent of its planned job cuts across its branches and technology division, alleged to affect 10,000 employees.
Wealth management, which is made up of superannuation, investment, retirement and insurance products and financial planning, turned in $413 million in NPAT, down 42% year on year.
Funds management, which comprises Colonial First State, Commonwealth Financial Planning (CFP) and the New Zealand arm, generated $1.1 billion in income - a decrease of $47 million or 4% on the prior year.
The majority of this income came from CFS, which contributed $862 million, up $21 million or 2%. This was driven mainly by growth in the FirstChoice and CFSWrap platforms, which had $94.3 billion and $32.4 billion in funds under administration respectively.
Commonwealth Financial Planning reported $73 million of income - a whopping 43% drop year on year - driven by lower volumes of initial advice fees and the cessation of ongoing service fees in February 2019.
As a result of lower performance fees and AUM, CFSGAM's bottom line dipped 18% to $240 million.
CBA also announced today it will shut down Financial Wisdom. It will additionally allow Pathways advisers to commence transitioning elsewhere.
CBA paid a dividend of $4.31 per share. Its share price was trading at $78.51 at publication time.
Chief executive Matt Comyn said six of the recommendations from the banking Royal Commission have been implemented.
"[We are] going to make sure we complete at least another eight before the end of the calendar year, taking the total to 14 of the 23 that we can implement by ourselves."
Promontory, the independent reviewer overseeing CBA's remediation action plan, released a report today stating the bank is on track and has made good progress in reaching its milestones. Almost half of the 153 action points have been achieved, Comyn said.