Westpac's annual earnings will fall by about $235 million as it pays out more customers it over-charged for financial services.
In a statement released after the market closed on Thursday, the bank said it had "increased provisions for customer refunds associated with certain advice fees" charged by its financial planners.
About two-thirds of the impact is expected to be negative revenue while the remainder will be recorded in costs.
Westpac says costs associated with responding to the ongoing royal commission were not included in these amounts.
The bank's chief executive Brian Haryzer said it was "disappointing" some of Westpac's past practices had not lived up to "appropriate standards".
Earlier this month, the lender agreed to pay a record A$35 million fine for wrongly approving thousands of mortgages.
Westpac says costs associated with responding to the ongoing royal commission were not included in these amounts.
The nations second-largest lender said reviews of potential further costs would continue into 2019.
Westpac is scheduled to report its full-year results in November.
Shares in the bank closed down 20 cents, or 0.7 per cent, at $27.71.
The financial sector fell lower for the fourth consecutive day as it prepares for the royal commission's interim report on Friday.
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