The discontinuation of operations had reflected negatively on the National Australia Bank (NAB) balance sheet, with the big banking group reporting a statutory net loss of $1.74 billion for the half year to March, despite a 6.5 per cent increase in cash earnings to $3.31 billion.
The bank announced to the Australian Securities Exchange (ASX) today that the $1.74 billion loss was particularly attributable to its exit from its UK operations but also acknowledged a charge of $801 million relating to claims under the Conduct Indemnity Deed.
However, NAB Wealth represented a bright spot for the bank, with chief executive, Andrew Thorburn, noting that the division had “continued its track record of delivering significantly improved results since 2014”.
He said that the long-term partnership and sale of 80 per cent of the life insurance business to Nippon Life was progressing well and would allow NAB Wealth to continue to provide insurance solutions while improving wealth returns to shareholders.
“In addition, we know there is strong upside for our Investments and Superannuation business from enhancing the customer experience and developing a closer relationship with our banking operations,” Thorburn said.
NAB Wealth cash earnings increased 12 per cent to $249 million driven by stronger insurance results, with net income rising four per cent, reflecting insurance premium growth and pricing increases.
It said expenses had declined by one per cent due to lower technology and project costs partly offset by an increase in the number of financial planners.
Looking at the business more broadly, Thorburn said the half-year result was the first squarely focused on the Australian and New Zealand business and suggested the bank was delivering on its strategic priorities.
