NAB shares fall after 9.3% earnings rise announced
NATIONAL Australia Bank has posted a cash earnings increase of 9.3% in its full-year results to September 30, released today.
Cash earnings for the year were $5.94 billion, an increase of $503 million on the September 2012 full year, due to higher earnings from all banking businesses.
While the figure was on target for expectations, the market had boosted NAB to a higher price than its peers, resulting in a fall in the share price on the back of the announcement.
Shares in NAB were down 3.17 per cent at $35.08 each in early trade.
National Australia Bank CEO, Cameron Clyne said The Group's full year results show an improved performance across most business units.
"Some improvement in the UK operating environment and initiatives to reduce the Australian risk profile have supported a lower charge for B&DDs," Mr Clyne wrote in an announcement to the ASX.
"Costs, excluding Australian restructuring and UK conduct-related costs, have been well contained, reflecting our ongoing focus on efficiency gains.
"Enhancing the Australian franchise remains a strategic priority, with further progress made during the year. Personal Banking again produced a strong result on the back of good momentum in housing lending and increased customer deposits.
"Wholesale Banking also performed well with solid earnings growth as it continues to build successfully on its franchise focus strategy. Despite subdued business conditions, Business Banking grew earnings through improved asset quality and maintained its leading market share in business lending.
"Results for NAB Wealth were mixed, with insurance industry conditions still challenging, while funds management benefited from more favourable equity markets and positive net flows.
"Internationally, NZ Banking and Great Western Bank had good performances and continued to grow earnings.
"Further progress against the UK restructuring agenda, combined with some improvement in the UK economic environment, has supported a better operating performance from the UK businesses, particularly in terms of lower B&DDs.
"Pleasingly the run-off of our NAB UK CRE book has continued and it now stands at £4.0 billion gross, £1.6 billion lower than when the portfolio was transferred to National Australia Bank Ltd in October 2012."
"Over the year, we've continued to simplify and digitise our Australian franchise. Since 2010 we've rationalised approximately 50% of our core banking products, and automated and simplified a number of processes so that bankers can spend more time with customers.
"Our enterprise-wide technology and infrastructure transformation is making good progress on a number of fronts. The upgrade of our core banking platform is tracking well with the launch of the first transaction product on the NextGen platform - UBank USaver Ultra - which offers a fully automated online application process.
"In addition, NAB has made significant structural changes to align our organisation to the
external environment and evolving customer behaviours. As a result, we are making it easier for our customers and our people to do business with us."