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NAB Profit weathers crunch

NAB Profit weathers crunch

(12 May 2008 – Australia) National Australia Bank has announced an increase in profits for the first half of 2008, weathering the storm of the credit crunch. The bank posted a solid cash earnings result of $A2.2 billion, up eight percent on the same period last year.

Performance of the underlying business was significantly better, with a 25.8 percent rise in net profit to $A2.7 billion, before taking into account one off items.

NAB chief executive officer, John Stewart, said that NAB was able to weather the storm of recent turbulent market conditions by adopting an extra conservative approach.

He said that the decision to take a conservative approach on liquidity was prudent given credit market conditions. With the right settings it is still possible to grow successfully in challenging conditions, he added.

The Business and Private bank in Australia continues to be a significant growth driver with revenue up 14.8 percent. Cash earnings increased 18.2 percent to $A948 million.

For the retail bank, revenue growth was up 6.4 percent to $A1.5 billion while cash earnings increased 13.9 percent to $A419 million.

However, NAB increased its first-half provision for bad and doubtful debts by 86.2 percent to $A726 million.

This included $A80 million for a margin loan held by the Allco Finance Group, $A84 million on loans held by two companies and higher collective provisions as a result of lending growth and liquidity facilities extended to securitisation conduits ($181 million).
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