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National Australia Bank is pre-empting a significant impact on its FY2024–25 operating expenses, with payroll remediation expected to incur $130 million.
The bank has revealed it expects the review and remediation of payroll issues to incur a major cost of $130 million, set to make its FY24–25 operating costs 4.5 per cent higher than FY2023–24.
NAB noted its payroll review and remediation were ongoing and total costs still remained uncertain, yet it had initiated an ongoing review into payroll-related benefits under current and certain historical agreements and was proactively transitioning to a new enterprise agreement 2024.
An apology was issued to the bank’s employees, with a declaration that it had engaged the Fair Work Ombudsman and Finance Sector Union to communicate with employees and keep them informed, as well as directly contacting those affected by the issues.
Sarah White, NAB Group executive for people and culture, said there had been a team dedicated to and given the task of continuing the investigation to resolve issues, remediate colleagues, and ensure sustained future compliance.
“Paying our colleagues correctly is an absolute priority. We are sorry and apologise to our colleagues that this has happened and have commenced remediating those impacted,” she said.
The $130 million expected to be incurred from ongoing payroll issues followed a payroll review in 2019, which incurred a $250 million cost between FY2019–20 and FY2021–22.
Andrew Irvine, NAB Group CEO, said this expected cost was “disappointing and must be fixed” as it was unknown how many staff had been impacted by the latest wave of underpayments.
Irvine noted that, along with this disappointing cost associated with the identification, rectification and remediation of the bank’s payroll issues, it was on track to target productivity savings in excess of $400 million in FY24–25.
“Balance sheet settings remain prudent over 3Q25, consistent with a focus on safety and sustainability. In addition, our actions to improve compliance with Australia’s anti-money laundering and counter-terrorism financing laws and transform our approach to managing financial crime [have] seen AUSTRAC cancel our enforceable undertaking,” Irvine said.
“We remain optimistic about the outlook and are well placed to manage NAB for the long term and deliver sustainable growth and returns for shareholders.”
