(Recasts, adds compliance costs, background) Feb 19 (Reuters) -...

(Recasts, adds compliance costs, background)

Feb 19 (Reuters) - IOOF Holdings Ltd (IFL) on Tuesday posted a 5 percent rise in half-yearly underlying profit but flagged an increase in compliance costs as a regulatory crackdown fuelled by a year-long misconduct inquiry put pressure on the financial industry.

The company expects to record A$20 million to A$30 million ($14.26 million to $21.39 million) in regulatory costs starting immediately and into fiscal year 2020, it said in a statement.

IOOF was among the worst-hit companies by the inquiry last year as it faced harsh scrutiny over allegations that it used pension customers' funds when compensating them for losses caused by the wealth manager.

As a result, in early December last year, two top IOOF executives stepped down after pressure from the country's prudential regulator, who had announced a move to ban five of IOOF's executives just days earlier.

IOOF's underlying net profit came in at A$99.9 million for the half year ended Dec. 31, compared to A$94.8 million a year ago.

The results was underpinned by a jump in funds under management, administration and advice, which rose 10 percent to A$137.8 billion helped by the acquisition of ANZ Wealth Management Aligned Dealer Group.

Statutory profit came in at A$135.4 million for the half year ended Dec 31, compared with A$45.2 million over the same period a year ago, boosted by one-off gains including the sale of the company’s corporate trust business.

($1 = 1.4021 Australian dollars)