MLC an 'area of softness'

wealth management wealth management division national australia bank australian securities exchange

6 February 2009
| By Mike Taylor |

National Australia Bank (NAB) has identified its wealth management division, MLC, as one of its areas of “revenue softness” at the same time as reporting first quarter unaudited cash earnings of around $1.1 billion.

In an announcement released on the Australian Securities Exchange today, NAB said group revenue remained strong despite rapidly emerging weakness across the relevant economies.

However, it said areas of softness were primarily in the United Kingdom, where significantly higher funding costs could not be adequately recovered, and MLC due to the impact of declining investment markets on wealth management funds under management.

Looking specifically at wealth management, the NAB announcement said consistent with industry experience, MLC’s funds under management declined during the quarter, reflecting negative net inflows and widespread market declines.

It said given lower volumes, management had accelerated cost reduction initiatives to help offset pressure on income.

Looking at its exposures, the announcement said the group charge for bad and doubtful debts in the December quarter was $824 million, with the specific provision charge being $521 million, approximately half of which related to three individual name exposures.

It said the collective provision charge was $303 million, mainly reflecting a decline in customer credit ratings across all businesses.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 weeks 4 days ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

1 week 3 days ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

5 days 21 hours ago

Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equi...

5 days 1 hour ago