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Wednesday 14

November, 2018 9:39 AM



NAB earnings slide on restructuring, scandal costs

NAB earnings slide on restructuring, scandal costs

National Australia Bank reported Thursday a 14.2 percent drop in cash earnings to AU$5.7 billion (US$4.0 billion) due to restructuring charges and the costs of repaying customers impacted by bank misconduct.

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01.11.2018 12:10 PM

National Australia Bank reported Thursday a 14.2 percent drop in cash earnings to AU$5.7 billion (US$4.0 billion) due to restructuring charges and the costs of repaying customers impacted by bank misconduct.

NAB's profit in the year to September 30 was still up five percent to AU$5.55 billion despite what chief executive Andrew Thorburn called a "challenging year".

"Our transformation is on track and benefits are emerging as we become simpler and faster," he said, pointing to growth in both housing and business lending.

NAB's result followed a similar announcement Wednesday by ANZ, another of Australia's "Big Four" banks, which reported a 16 percent drop in cash earnings.

NAB, ANZ and Australia's other main banks -- among the world's wealthiest -- have been the target of a top-level inquiry that found the companies had committed widespread misconduct, including charging the dead for services, providing questionable financial and life insurance advice and mortgage fraud.

In an interim report released in September, the public inquiry accused the big banks of pursuing "short-term profit at the expense of basic standards of honesty". 

NAB's 2018 results included AU$360 million in customer remediation payouts linked to the inquiry's findings, as well as $755 million in restructuring costs, mainly linked to redundancy payments.

Thorburn said the NAB was actively addressing the shortcomings uncovered by the royal commission -- the country's top level of public inquiry.

"We are listening and responding to customers, including to royal commission issues, and are proactively taking steps to be more customer focused," he said.
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