(8 February 2010 – Australia) National Australia Bank has delivered its first quarter trading update, revealing an unaudited cash profit, for the three months to December 31st, of A$1.3 billion.The bank said that key drivers behind the results were improved banking operations in Australia and mark to market gains in the group’s Specialised Group Assets (SGA).
The group also noted marginally lower charges for bad and doubtful debts contributed to the “pleasing result”.
In a statement to the ASX, NAB said that Group revenue increased due to continued volume growth in Personal Banking and moderate volume growth and repricing for current market conditions in Business Banking.
The Group charge for bad and doubtful debts was lower at A$493 million and included a A$25 million overlay relating to floods in Central Queensland in December 2010.
For the financial year-to-date NAB said it had raised approximately A$12.6 billion of unsecured term wholesale funding, against a 2011 full year target range of A$25 billion to A$30 billion.
“The first quarter result is pleasing and reflects the progress we have been making against the Group’s strategic priorities and the solid momentum this is delivering in our core Australian business,” National Australia Bank Group CEO Cameron Clyne said today.
“Business Banking and Personal Banking were key drivers of Group revenue during the first quarter. Business Banking continues to gain market share and extend its leadership position in SME banking in what remains a subdued business credit environment. Personal Banking continues to experience strong momentum in mortgages and transaction accounts, and improved its product and service capabilities,” Mr Clyne highlighted.
“NAB remains the market’s business bank of choice holding a majority share of lending relationships, particularly in the SME segment, growing depth of presence in institutional, leading reputational measures as a business bank amongst customers and strong positioning in the country’s lead growth states” commented East & Partners’ Principal Analyst, Paul Dowling.
“Domestic challenges abound, however, especially in converting these lead positions into the real business of wallet share improvement and cross sell. With moribund customer switching driving very difficult customer acquisition gains for all Big 4 domestic banks, the key to growth short term lies in enhancing existing customer relationships”, he added.
The bank’s capital position remained strong, with the Tier 1 ratio increasing to 8.96 percent from 8.91 percent at 30 September 2010. The Core Tier 1 ratio was 6.92 percent.