NAB challenged by UK business woes

by Mackenzie McCarty31 Oct 2012

NAB has announced a 22% plunge in group net profit for the full year to September, blaming its troubled UK operations for the poor result.

The group's profit dropped by $1.1 billion to $4.1 billion, in an unexpected result following previous signals that profits for the bank would be in line with the previous year.

Bad debt provisions rose 44% to $2.6 billion as a result of the UK problems, and the result marked the first year since 2009 that the bank reported a decline in year-on-year profit growth.

NAB CEO Cameron Clyne said the results reflected the strength of the core Australian and New Zealand banking businesses, as well as the restructure and re-focus of its business in the UK.

“The core Australian franchise performed well with group cash earnings excluding UK banking up 9.2% over the year," Clyne said.

"Personal banking had a particularly strong year delivering increased returns, higher market share in mortgages and household deposits, and the highest bank customer satisfaction score of the four major Australian banks ever recorded in the Roy Morgan survey," he said.

However, Clyne outlined the measures the group had taken in the UK due to continued economic problems.

"In October, the vast majority of the UK commercial real estate portfolio was transferred from Clydesdale Bank PLC to National Australia Bank Limited, improving the Clydesdale Bank balance sheet structure and simplifying the business," Clyne said.

Related stories:

NAB most popular bank in history