NAB profit slumps 22%
National Australia Bank Limited (NAB) saw its post-tax profit slump 21.6% lower to $2.1 billion for the half-year on the back of accounting volatility from significantly lower movements on financial instruments. However the bank said cash earnings for the six months came in at $2.2 billion, up 20.9% on the September 2009 half-year and an 8.2% increase on the March 2009 half-year.
The bank said a strong performance from its business banks and MLC & NAB Wealth and a decline in bad debt provisions countered a smaller contribution from international earnings as the Aussie dollar strengthened.
The rebound in cash earnings came as bad and doubtful debts charge fell by 32.1% to $1.2 billion as economic conditions improved, particularly in business banking.
Revenue fell by 3.3% to $8.2 billion largely due to more normal income in global markets and treasury after an exceptionally strong contribution in 2009, the bank said.
CEO, Cameron Clyne, said that another key driver for growth was the Australian mortgage market, which benefited from lower interest rates and government stimulus packages.
Meanwhile, Cameron Clyne said NAB would continue to pursue avenues to acquire the AXA Asia Pacific business, which was blocked by the ACCC last month.
”The proposal is consistent with the group’s strategic agenda to grow our wealth management business and to improve shareholder returns,” Mr Clyne said.
NAB faced considerable pressure during the global financial crisis on its UK operations, with Mr Clyne saying the industry faced a period of consolidation, opening up business opportunities for the bank.
”NAB's well managed business in the UK is in a good position to grow organically and well placed to consider other ways to improve shareholder value,” Mr Clyne said.
The board declared an interim dividend of 74c per share, up 1c from last year, representing a payout ratio of nearly 72%.
At the close Wednesday, NAB shares were trading at $26.78.
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