AMP has admitted that it had grossly underestimated the cost of remediating its customers who were charged fees-for-no-service.
The embattled institution’s interim CEO Mike Wilkins told the royal commission that AMP was preparing to lose an astounding $778 million in light of updated estimates.
“AMP believed, as did the industry, that this was not such a large issue,” Wilkins conceded during Tuesday’s public hearing.
The bulk of that headline figure will be used to remediate fee-for-no-service victims as well as a smaller allocation to those who received inappropriate advice.
It is a blow-out for a bank which has already lost former CEO Craig Meller over the scandal as well as several key staff, including chair Catherine Brenner and general counsel Brian Salter.
Wilkins told the royal commission that its previous program had been accelerated after it was believed it would take 17 years to be completed.
The new program is now expected to wrap up in three and will be closely watched by incoming CEO Francesco De Ferrari when he takes up the role this week.
However, the beleaguered brand is not out of the woods just yet, with Your Money chief business reporter Leo Shanahan telling TICKY that there could be another scandal on its way.
“He also revealed that they’re very closely watching their corporate super employee program because they’re concerned there that another fee-for-no-service scandal could be brewing,” Shanahan explained.
“They’re urgently reviewing that program now as well.”
Keep up with all Your Money’s royal commission coverage here.