National Australia Bank has posted a $5.94 billion full year profit, up more than nine percent on the previous year.
The cash profit, a measure banks use to reflect underlying performance, rose in the year to September 30 as the bank contained costs and reduced bad debts relating to its troubled UK business.
It compares to a cash profit of $5.4 billion in the previous year.
The bank’s net profit, which includes one-off financial items, was $5.45 billion, up 33.6 percent from $4.08 billion in the previous year.
NAB chief executive Cameron Clyne said the result reflected an improved performance across most areas of the business.
“The group’s full year results show an improved performance across most business units, combined with solid progress against our simplification and digitisation agenda,” he said.
The bank increased its net revenue two per cent, to $18.58 billion, during the year while its group net interest margin fell nine basis points to 2.02 per cent.
The total charge for bad and doubtful debts was $1.93 billion, down $681 million compared to the previous year thanks to improved asset quality trends, particularly in NAB’s UK business and its business banking division.
“Some improvement in the UK operating environment and initiatives to reduce the Australian risk profile have supported a lower charge for bad and doubtful debts,” Mr Clyne said.
Operating expenses were contained at 1.9 per cent, excluding the one-off costs relating to the restructure of the bank’s Australian business.
Mr Clyne said the bank had worked to simplify its Australian business and boost efficiency.
“Over the year, we’ve continued to simplify and digitise our Australian franchise,” he said.
“Since 2010, we’ve rationalised approximately 50 per cent of our core banking products, and automated and simplified a number of processes so that bankers can spend more time with customers,” he said.
NAB announced a fully-franked final dividend of 97 cents, an increase of seven cents compared to a year ago.