National Australia Bank has lifted its first-half cash profit 2.3 per cent to $3.29 billion and held its interim dividend at 99 cents.
Revenue for the six months to March 31 rose 1.8 per cent but net interest margin declined by 0.11 percentage points on the prior corresponding period to 1.82 per cent.
Andrew Thorburn and the NAB board have left dividends steady. Photo: TOMOHIRO OHSUMI
“The operating environment for banks remains challenging, including heightened regulatory change, digital disruption and increasing stakeholder expectations,” chief executive Andrew Thorburn said.
The bank lifted its bad and doubtful debts provision to $394 million which was up $19 million.
Mr Thorburn highlighted commercial property as a slightly weaker performer that had produced the increase.
But he said that $89 million increase in provisions for bad and doubtful debts in commercial property had to be considered against a $60 billion commercial property loan book.
“This is another solid result and reflects improving momentum as we execute on our strategy,” Mr Thorburn said.
“Revenue is up, our asset quality remains sound and we have further strengthened our funding and capital positions.”
Mr Thorburn said that the bank had managed to keep the increase in expense to 0.8 per cent as the company reduced its headcount by 711 full time equivalent positions, a decrease of about 2 per cent.
“Disciplines in place to reshape our business, including use of automation and meeting more of our customers’ needs digitally, are delivering efficiency benefits. In [the first half] we achieved $102 million of productivity savings against an annual target of greater than $200 million,” Mr Thorburn said.
Mr Thorburn said the banks return on equity stood at 14 per cent.
“There have been solid contributions across the business, in particular our priority segments of small and medium business where we have maintained or grown our leading market shares,” he said.