NAB posts $1.74b half-year loss on Clydesdale sale

Thursday, 5 May 2016 06:42:31 | Peter Ryan

NAB has maintained its dividend at 99 cents. (ABC News: Nic MacBean, file photo)

National Australia Bank has posted a $1.74 billion statutory first-half loss after the demerger of its troubled British operation, Clydesdale Bank.

While the statutory loss reflects a one-off related to "discontinued operations" at Clydesdale, the NAB cash profit is up 6.5 per cent at $3.31 billion, which is slightly ahead of forecasts.

NAB's interim dividend remains unchanged at 99 cents per share, fully-franked.

Earlier this week, ANZ surprised investors with a 7 per cent dividend cut after its half-year profit fell by 22 per cent.

NAB's revenue increased by 3.3 per cent, and a stronger performance from NAB Wealth saw the net interest margin rise by 1 basis point to 1.93 per cent.

External Link: NAB profit results

NAB's total charge for bad and doubtful debts fell by 6 per cent, or $24 million, to $375 million. However, compared to the September 2015 half-year the total charge increased by 7.4 per cent or $26 million.

NAB said the increase relates to higher provisions for a "small number of large single name exposures" in Australia which the bank has declined to name.

"When you've got an economy in transition you're going to face some stressed accounts," said the bank's chief executive Andrew Thorburn.

"If you look at the specific provisions, there's only four names. We don't obviously divulge who they are but we do say we're over 50 per cent covered."

The bank also highlighted a "continuing challenging outlook" for the dairy industry in New Zealand.

Mr Thorburn said he is continuing to monitor mortgage defaults but is not alarmed.

"Where we're seeing a pickup is where you'd expect - Western Australia and Queensland where there has been pressure on mining and mining services," he said.

NAB's result comes in a week of soft performances, confirming a negative trend for Australia's major banks in the face of a downturn in commodity prices and tougher capital requirements imposed by the banking regulator.

AustraliaPlus

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NAB posts $1.74b half-year loss on Clydesdale sale

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