NAB posts $5.5 billion profit
(28 October 2011 – Australia) Fast-paced growth in mortgage sales combined with signs of a rebound in business lending helped National Australia Bank (NAB) increase its full-year cash profit by 19.2 percent to A$5.5 billion.
The record result, helped by a drop in the cost of bad debts over the year, came in at the top end of analyst expectations, defying the tough lending market for banks.
NAB chief executive Cameron Clyne said any moves by the central bank to cut interest rates next week may not be the catalyst to boost confidence across the economy while Europe continues to battle deep financial problems.
Clyne described Australia as experiencing a 'ten-speed economy' with a range of industries either struggling or outperforming.
'The simplistic thing is to say mining is good and retail is bad. It’s much more granular than that,' Mr Clyne told reporters.
Even as expectations mount that the Reserve Bank will cut interest rates by 25 basis points next Tuesday to spur on growth, Clyne said global issues are to blame for holding back consumers and business.
'The primary constraint at the moment on consumer spending, consumer lending and business lending is more about confidence.
'If you have a rate cut and people are still looking at overseas concerns that may not necessarily be the catalyst for confidence.'
Critically, NAB was able to increase revenue by 5.7 percent while keeping expense growth below the rate of inflation coming in at 1.4 percent over the year.
Net profit rose to A$5.22 billion for the 12 months to September 30 from A$4.22 billion a year earlier.
Clyne said the latest profit followed efforts to reposition the retail banking business over the past two years.
'NAB has delivered good growth in earnings and revenue and carefully managed costs. In a challenging environment, the balance sheet and capital positions have been strengthened," Mr Clyne said this morning.
Cash profit for NAB during the second half to end-September was up 4.6 percent to A$2.79 billion.
NAB's flagship business banking unit delivered an 11.5 percent increase in cash earnings to A$2.4 billion, with growth in revenue ahead of expense growth mostly as lending outpaced rivals.
Cash earnings for NAB's personal banking operation which sells mortgages and deposits to consumers increased by 25.4 percent to A$932 million. This was helped by revenue gains largely from growing home lending volumes at more than three times the market rate.
NAB chief executive Cameron Clyne said any moves by the central bank to cut interest rates next week may not be the catalyst to boost confidence across the economy while Europe continues to battle deep financial problems.
Clyne described Australia as experiencing a 'ten-speed economy' with a range of industries either struggling or outperforming.
'The simplistic thing is to say mining is good and retail is bad. It’s much more granular than that,' Mr Clyne told reporters.
Even as expectations mount that the Reserve Bank will cut interest rates by 25 basis points next Tuesday to spur on growth, Clyne said global issues are to blame for holding back consumers and business.
'The primary constraint at the moment on consumer spending, consumer lending and business lending is more about confidence.
'If you have a rate cut and people are still looking at overseas concerns that may not necessarily be the catalyst for confidence.'
Critically, NAB was able to increase revenue by 5.7 percent while keeping expense growth below the rate of inflation coming in at 1.4 percent over the year.
Net profit rose to A$5.22 billion for the 12 months to September 30 from A$4.22 billion a year earlier.
Clyne said the latest profit followed efforts to reposition the retail banking business over the past two years.
'NAB has delivered good growth in earnings and revenue and carefully managed costs. In a challenging environment, the balance sheet and capital positions have been strengthened," Mr Clyne said this morning.
Cash profit for NAB during the second half to end-September was up 4.6 percent to A$2.79 billion.
NAB's flagship business banking unit delivered an 11.5 percent increase in cash earnings to A$2.4 billion, with growth in revenue ahead of expense growth mostly as lending outpaced rivals.
Cash earnings for NAB's personal banking operation which sells mortgages and deposits to consumers increased by 25.4 percent to A$932 million. This was helped by revenue gains largely from growing home lending volumes at more than three times the market rate.
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