NAB cops 37% cash earnings hit

Excluding large notable items of $1 billion, the group’s cash earnings came to $4.7 billion, down 25.9 per cent on the prior year.

Net profit from continuing operations came to $3.4 billion, a 40.8 per cent plunge from the year before.

Revenue was down 1.4 per cent to $17.1 billion, while expenses rose by 2 per cent (excluding large notable items) to $7.6 billion.

NAB chief executive Ross McEwan noted the bank had felt the impacts of total forward looking provisions of $1.8 billion, after the bank added $1 billion in the second half for extra cover around COVID.

“Stronger provisions are the right thing to do but have impacted FY20 cash earnings, which are down 25.9 per cent compared with FY19,” Mr McEwan said.

“In addition low interest rates and lower fee income contributed to a decline in revenue. While we are acutely aware of the need for disciplined cost management, costs rose in FY20 as we adjusted to the COVID-19 environment and started implementing our strategy refresh announced in April.”

Across the segments, personal banking was the division to see a rise in cash earnings, increasing 9.5 per cent to $1.3 billion.

The business and private banking business saw an 11.6 per cent drop to $2.4 billion, while corporate and institutional banking fell by 2.6 per cent to $1.4 billion and the New Zealand bank declined by 1.8 per cent to $1 billion.

Looking forward, Mr McEwan pointed to the stimulus for households and businesses in the Federal Budget, combined with a reopening of the state borders will provide a bridge to economic recovery.

The final dividend came to 30 cents per share, making the full year payout 60 cents, in contrast to last year’s $1.66.