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National Australia Bank’s full-year profit has dropped 14.2 % to $5.7 billion impacted by restructuring costs and $360 million of customer remediation.
All big banks have undertaken customer remediation in response to the royal commission into financial sectors. Customer remediation has reduced NAB’s operating income by $249 million and increased operating expenses by $111 million.
NAB has reported cash earnings have declined 2% due to higher investment spend from investment to transform the business. While, revenue was higher with good lending growth and stable margins.
NAB reported an increase in its common equity tier 1 ratio to 10.2% at September. 30.
'We are listening and responding to customers, including to Royal Commission issues, and are proactively taking steps to be more customer focussed, as we strive to be Australia’s leading bank, trusted by customers for exceptional service.' Said NAB CEO Andrew Thorburn
NAB’S Full year results
- Net Interest Margin was flat at 1.85% excluding Markets and Treasury increased 3 basis points (bps), reflecting the impact of prior period repricing and lower funding costs, partly offset by the bank levy and home lending competition.
- Expenses rose 17.8%, but excluding restructuring-related costs
- Cash profit down 14.2pct to $5.702b
- Final dividend unchanged at 99 cents, fully franked
NAB announced an acceleration strategy last year, with a focus on making the bank a faster and technology first bank, with greater focus on customers.
The bank reported a $1.5 billion increase in investment over the three years to September 2020, to bring total investment spend to approximately $4.5 billion. NAB says the investment is focussing on delivering a better customer experience and more reliable and resilient technology.
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