NAB has delivered disappointing half-year results, announcing to the Stock Exchange this morning that its dividends were down to 83 cents per share for the period, as compared to 99 cents for the corresponding period each of the last five years.
The bank’s chief executive, Philip Chronican, said the board thought it both prudent to reduce the interim dividend and necessary to partially underwrite the 1H19 dividend reinvestment plan.
Cash earnings for its consumer banking and wealth division also took a big hit, declining by 20.6 per cent compared to the first half of last year, hitting $638 million. The bank put this down to lower margins and higher credit impairment charges offsetting above system housing lending growth, as well as predictably lower wealth revenue.
The business and private banking division also recorded a small decline of 1.3 per cent between the two periods, with cash earnings sitting at $1.462 billion for 1H19, while corporate and institutional banking increased slightly by 0.4 per cent.
NAB’s New Zealand banking division proved its shining light in an otherwise bleak set of results, with its 1H19 cash earnings of $532 million representing a positive 7.7 per cent change on 1H18.
The bank’s overall earnings were also hit by a previously-announced $525 million customer remediation bill, reflecting how deep the impact of the Banking Royal Commission had been on NAB. Both its chair and chief executive had been replaced this year, for example.
On the Royal Commission however, the bank noted in the half-yearly results that it had already actioned 26 of the Commission’s 76 recommendations and offered support to 72 of them. One such change was confirmation that the abolition of grandfathered commissions for NAB Financial Planning employed advisers and closing the ‘Introducer’ payments program would come into effect from 1 October, 2019.