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NAB result "disappointing"

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National Australia Bank (NAB) is considering a public float of its troubled UK business after announcing a 9.8 per cent slide in its full year cash profit to $5.18 billion.

Chief executive Andrew Thorburn says the bank is looking at ways to exit the UK business, including a possible stock market float, so NAB can focus on its core Australian and New Zealand operations.

“In relation to exiting UK Banking this means we are now examining a broader range of options including those provided by public markets,” he said in a statement.

“Our clear focus is on our Australian and New Zealand franchises and providing a better customer experience, and as a result we need greater urgency dealing to our remaining low returning assets.”

NAB’s UK business includes Yorkshire and Clydesdale banks.

NAB recorded the near 10 per cent slide in its full year cash profit after taking a $1.5 billion hit from provisions and impairments, most of which were liked to the UK division.

Net profit for the year to September 30 was $5.295 billion, down 1.1 per cent from $5.355 billion a year ago.

NAB will pay a final, fully franked, dividend of 99 cents per share, up from 97 cents a year ago.

Thorburn said the result was disappointing.

“While our Australia and New Zealand franchises are in good shape, it is disappointing to record a full year result that includes $1.5 billion after tax in UK conduct provisions and other impairments,” he said.

Cash earnings from the Australian operations were flat at $4.9 billion, but revenue fell 1.4 per cent due in part to slide in income from its markets division.

Meanwhile, the bank’s net interest margin, the profit it makes on loans, fell during the year due to tough competition.

 

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