NAB reports 9 percent profit growth
(16 February 2016 - Australia) National Australia Bank (NAB) has said that its first quarter profits have grown, buoyed by a reduction in bad and doubtful debts.
The bank reported an unaudited profit increase of 9 percent to A$1.75 billion. It also said revenue grew 4 percent, however half of that was driven by a legal settlement and gains from the sell-off of its UK real estate portfolio.
NAB’s bad and doubtful debts decreased to A$193 million, a 15 percent reduction compared to the previous period.
In a statement chief executive Andrew Thorburn said: "Maintaining a strong balance sheet has been an essential component of our group strategy, and the recently completed $5.5 billion rights issue was consistent with this objective.
"As a result, we are well placed to respond to APRA's announcement of an increase in mortgage risk weights from 1 July 2016."
"Following the end of the third quarter, we successfully divested our remaining holding in Great Western Bank, which will release approximately A$1.3 billion of CET1 capital (approximately 34 basis points)," Thorburn said.
"In addition, NAB Wealth's life reinsurance transaction took effect from 1 July 2015 which is expected to release a further A$500 million of CET1 capital (13 basis points) to the NAB Group and reduces the group's exposure to retail life insurance while maintaining distribution of life insurance products and services to the group's customers.
"Substantial progress has also been made on our intention to pursue a demerger and IPO of Clydesdale Bank over the last three months and we will provide the market with a detailed update of the proposed transaction at our 2015 full-year results."
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