Of the second-half 2019 charges, approximately 92 per cent are for wealth and insurance-related matters, with the remainder being caused by banking, it was outlined.

In combination with provisions raised from July 2018 to June 2019, which have not yet been utilised, NAB’s total reserve for customer remediation at 30 September was at $2.09 billion.

The bank said that the addition of the $832 million means it has fully estimated the provisions needed. Until all customer payments are completed, however, the final remediation costs remain uncertain.

According to NAB chief executive Philip Chronican, while the bank had previously expected the need for additional customer remediation provisions, the size of the provisions is significant.

The key items giving rise to the costs include provisions increased to allow for customer refunds based on total ongoing advice fees between 2009-2018 of around $1.3 billion, with an assumed refund rate of 36 per cent, or around 55 per cent including interest costs.

Provisions have been increased as well for non-compliant wealth advice and adviser service fees charged by NAB Financial Planning, reflecting higher expected costs and a higher assumed refund rate of 28 per cent (or around 39 per cent, including interest costs).

Consumer credit insurance sales through certain NAB channels also contributed, related to a remediation program that arose from an ASIC industry-wide review.

“We have undertaken to significantly uplift customer remediation practices, as part of a broad program of reform to change the way we operate and ensure NAB meets customer and community expectations,” Mr Chronican has outlined.

“We have made approximately 450,000 payments to customers with a total value of $202 million between June 2018 and August 2019, and have a dedicated remediation team of about 400 people helping to bring greater discipline and focus to remediating customers.”

“We understand that shareholders will be rightly disappointed. However, we also recognise the need to prioritise dealing with these past issues and fixing them for customers.

It comes after ASIC’s recent announcement that it would legally challenge NAB’s use of unlicensed home loan introducers.