NAB shareholders hit with 16 per cent dividend cut

NAB philip chronican

image
image
expand image

NAB has delivered disappointing half-year results, announcing to the Stock Exchange this morning that its dividends were down to 83 cents per share for the period, as compared to 99 cents for the corresponding period each of the last five years.

The bank’s chief executive, Philip Chronican, said the board thought it both prudent to reduce the interim dividend and necessary to partially underwrite the 1H19 dividend reinvestment plan.

Cash earnings for its consumer banking and wealth division also took a big hit, declining by 20.6 per cent compared to the first half of last year, hitting $638 million. The bank put this down to lower margins and higher credit impairment charges offsetting above system housing lending growth, as well as predictably lower wealth revenue.

The business and private banking division also recorded a small decline of 1.3 per cent between the two periods, with cash earnings sitting at $1.462 billion for 1H19, while corporate and institutional banking increased slightly by 0.4 per cent.

NAB’s New Zealand banking division proved its shining light in an otherwise bleak set of results, with its 1H19 cash earnings of $532 million representing a positive 7.7 per cent change on 1H18.

The bank’s overall earnings were also hit by a previously-announced $525 million customer remediation bill, reflecting how deep the impact of the Banking Royal Commission had been on NAB. Both its chair and chief executive had been replaced this year, for example.

On the Royal Commission however, the bank noted in the half-yearly results that it had already actioned 26 of the Commission’s 76 recommendations and offered support to 72 of them. One such change was confirmation that the abolition of grandfathered commissions for NAB Financial Planning employed advisers and closing the ‘Introducer’ payments program would come into effect from 1 October, 2019.

 

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...

1 month 3 weeks ago

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

2 months ago

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

2 months ago

SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positiv...

2 weeks 2 days ago

Original bidder Bain Capital, which saw its first offer rejected in December, has returned with a revised bid for Insignia Financial....

1 week 2 days ago

The FAAA has secured CSLR-related documents under the FOI process, after an extended four-month wait, which show little analysis was done on how the scheme’s cost would a...

1 week ago

TOP PERFORMING FUNDS