Overcharged customers to be refunded in 2006, NAB says
(9 November 2005 – Australia) On the day it announced its full year result, National Australia Bank said it would refund customers who were overcharged on a number of fixed rate interest only type loans.
The errors began in 1992 and added up to A$21.6 million on the loans which were used primarily for business purposes.
The bank said it had provisioned A$18 million post tax for the error in its full year accounts to refund customers with interest.
Customers will start being refunded in early 2006.
NAB uncovered the problem during its review of manual processes and systems earlier this year.
"As a result of this work, we have recently identified an error on some fixed rate interest only business and investment loans where a manual intervention by the banker was required when their fixed rate period expired, to ensure the loan reverted to the correct rate," NAB executive director and CEO of Australia, Ahmed Fahour, explained.
He said the problems had now been resolved.
"We said that as part of stabilising the business we needed to look hard at our processes and systems," Fahour said.
He said it was part of rebuilding trust with the bank’s customers.
The bank said it had provisioned A$18 million post tax for the error in its full year accounts to refund customers with interest.
Customers will start being refunded in early 2006.
NAB uncovered the problem during its review of manual processes and systems earlier this year.
"As a result of this work, we have recently identified an error on some fixed rate interest only business and investment loans where a manual intervention by the banker was required when their fixed rate period expired, to ensure the loan reverted to the correct rate," NAB executive director and CEO of Australia, Ahmed Fahour, explained.
He said the problems had now been resolved.
"We said that as part of stabilising the business we needed to look hard at our processes and systems," Fahour said.
He said it was part of rebuilding trust with the bank’s customers.
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