NAB to inject $200 million into Wealth Management

TheNational Australia Bank(NAB) will invest $200 million into its Australian Wealth Management division during the next three years, with the aim to create a market leading adviser system.

The announcement, made today by NAB managing director and chief executive Frank Cicutto, is part of the group’s Positioning for Growth program.

“Following the recent appointment of a new senior management team, the changes announced today allow us to make the investments to capture growth opportunities whilst maintaining our earnings momentum,” Cicutto says.

Under the NAB program, a further $90 million will be reinvested into developing the United Kingdom’s Wealth Management operation and another $95 million will be used to upgrade IT systems at NAB’s Clydesdale and Yorkshire banks.

The Positioning for Growth initiatives are in line with the NAB’s growth forecast of better than 12 per cent cash earning per share growth in 2003 and 2004.

Cicutto says targets for NAB’s businesses have been set and cost savings are expected to reach $370 million by September 2004.

“The cost to income ratio of the Australian retail banking operations is planned to be mid 40 per cent by September 2004,” Cicutto says.

The planned business growth and initiatives means further staff restructuring, with 1500 redundancies expected in Australia in the next 18 months.

“Overall there will be a reduction of 3400 positions but this will be offset by 1400 new positions and natural attrition and redeployment”, the bank says.