National Australia Bank has emerged from the global financial crisis in better shape than ever, posting a net profit of $4.22 billion for the 2010, up a massive 63.2 percent on the previous year.
NAB’s Business Banking and MLC & NAB Wealth were key contributors to the bank’s strong performance, with cash earnings up 19.3 percent to $4.6 billion. The sharp rise in NAB’s statutory net profit for 2010, up 63.2 percent is attributed to, in part, the poor performance of the bank in 2009 due to a number of legal and tax proceedings and the writing off of GFC related bad debt in the reporting period.
NAB CEO Cameron Clyne today said the bank had recovered well from the GFC by leveraging its strong position in business banking and wealth management, with cash earnings from Business Banking up 37.1 percent to $2.2 billion.
“NAB’s ongoing strength in Business Banking and MLC and NAB Welath were key contributors to earnings growth during the year, along with the stabilisation in asset quality”
“Business banking recorded a strong increase in earnings, reflecting better underlying profit performance, increased lending in the face of netative system growth, and lower bad and doubtful debt charges. It also strengthened its market leading position and continued to actively support businesses across Australia through its relationship banking offering” Mr Clyne said today.
NAB’s Personal Banking revenues fell due to the bank’s reduction in a range of fees for credit cards and personal savings accounts. NAB has shifted its strategy with the NAB Personal Banking division to focus on long term customer retention and satisfaction levels through lower fees and charges rather than short term profit gouging.
“Earnings momentum returned to the Personal Banking franchise in the second half of the year. Rebasing this business on a long-term sustainable basis has been a key part of the effort to build NAB’s reputation. While there is more to be done, this early momentum was achieved through the abolition of a range of banking fees, competitive mortgage pricing and streamlining sales and service processes. Mr Clyne said.
