NAB lifts earnings to $1.6 billion
National Australia Bank (NAB) has joined both the Commonwealth Bank and ANZ in confirming the health of the Australian banking sector, reporting a seven per cent increase in unaudited cash earnings to $1.6 billion in a third quarter trading update.
The update, released on the Australian Securities Exchange (ASX) today also pointed to a stronger performance by the bank’s wealth management division.
Commenting on the result, NAB’s new chief executive officer, Andrew Thorburn described the outcome as satisfactory but, in doing so, pointed to a number of challenges within the company’s United Kingdom businesses requiring further provisioning.
“Conduct charges are difficult to predict, but we now expect that we will need to take further provisions at the full year result for both interest rate hedging products and Payment Protection Insurance,” he said. “In addition, the Scottish Independence vote takes placed on 18 September and a vote in favour of independence may give rise to significant additional costs and risks for Clydesdale Bank.”
Looking at the Australian business, the NAB announcement pointed to NAB Wealth cash earnings increasing over the quarter benefiting from improved insurance claims results “while lapses remained stable and the impact of higher funds under management was offset by a mix change to lower margin wholesale investment business in the period”.
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