Cash earnings slightly down amid rising expenses
National Australia Bank’s cash profit fell 0.2 per cent from September as it recorded higher charges for bad loans at its business bank and increased expenses.
The country’s largest lender to companies said Thursday that cash earnings were nearly flat at $7.1 billion from the previous year and that the economic outlook remains positive.
NAB reported a slight decline in cash profits due to higher bad debt charges.Credit: Nine
The bank said its revenue rose 2.9 percent in the year, helped by loan growth and widening margins, but it also saw loan impairment charges rise, mainly as business customers faced financial difficulties.
As profits decreased slightly, expenses also increased by 4.6 percent; This increase includes a previously announced $130 million charge due to underpayment of wages and employee benefits. The result is slightly lower than the market expected, according to estimates previously cited by UBS.
Chief executive Andrew Irvine acknowledged the rise in bad debt charges but said the bank was making progress selling loans through its own bankers, as opposed to mortgage brokers, and was optimistic about the economy.
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“Cash earnings were generally stable throughout the year. Pleasingly, a number of key asset quality results also improved, while loan impairment charges increased. [the second half of the year]“It is consistent with Australia’s supportive economic environment,” Irvine told investors.
“We are making good progress on our key priorities, such as growing business banking, increasing deposit growth and strengthening private mortgage lending.
The final dividend remained steady at 85 cents per share.
