NAB results: Full-year cash profit down 9.8 per cent, UK sell-off mooted
NATIONAL Australia Bank is considering a public float of its troubled UK business after announcing a 9.8 per cent slide in its full year cash profit.
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NATIONAL Australia Bank is considering a public float of its troubled UK business after announcing a 9.8 per cent slide in its full year cash profit to $5.18 billion.
Chief executive Andrew Thorburn says the bank is looking at ways to exit the UK business, including a possible stock market float, so NAB can focus on its core Australian and New Zealand operations.
“In relation to exiting UK Banking this means we are now examining a broader range of options including those provided by public markets,” he said in a statement.
“Our clear focus is on our Australian and New Zealand franchises and providing a better customer experience, and as a result we need greater urgency dealing to our remaining low returning assets.” NAB’s UK business includes Yorkshire and Clydesdale banks.
NAB recorded the near 10 per cent slide in its full year cash profit after taking a $1.5 billion hit from provisions and impairments, most of which were liked to the UK division.
Net profit for the year to September 30 was $5.295 billion, down 1.1 per cent from $5.355 billion a year ago.
NAB will pay a final, fully franked, dividend of 99 cents per share, up from 97 cents a year ago.
Chief executive Andrew Thorburn said the result was disappointing.
“While our Australia and New Zealand franchises are in good shape, it is disappointing to record a full year result that includes $1.5 billion after tax in UK conduct provisions and other impairments,” he said.
Cash earnings from the Australian operations were flat at $4.9 billion, but revenue fell 1.4 per cent due in part to slide in income from its markets division.
Meanwhile, the bank’s net interest margin, the profit it makes on loans, fell during the year due to tough competition.
Mr Thorburn said NAB was looking to boost the performance of its Australian operations by investing more in home lending and business banking.
“While satisfied with the progress our Australian business is making, there is more we can do,” he said.
“It is essential we continue to invest in core businesses where we have real competitive advantage, especially housing lending and, in Business Banking our SME (small- to medium-sized business), agriculture, government and education, and health franchises.” Cash earnings from the UK rose to STG158 million ($A288.40 million), from STG80 million a year ago, thanks to lower bad debt charges.
Earnings from NAB’s wealth division rose 13.4 per cent to $365 million thanks to higher investment earnings, while New Zealand cash earnings rose 2.4 per cent in local currency terms to $NZ807 million ($A751.29 million).
Originally published as NAB results: Full-year cash profit down 9.8 per cent, UK sell-off mooted
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