NAB Wealth performs despite company profit drop
The National Australia Bank has surprised the markets by announcing a 21.8 per cent drop in full-year net profit to $4082 million.
In an announcement released on the Australian Securities Exchange (ASX) today, the company attributed the decline to an increased charge for bad and doubtful debts, mainly in the United Kingdom.
The company announced a final dividend of 90 cents per share fully franked, delivering a total 2012 dividend of $1.80.
However NAB chief executive Cameron Clyne emphasised the strength of the Australian and New Zealand banking businesses, and the fact that the Australian economy had performed well relative to other advanced economies - albeit that business conditions across sectors remained mixed.
Drilling down on the banks' divisional performance, the ASX announcement pointed to an improving picture with respect to wealth, with cash earnings increasing by $15 million (3 per cent), which it said reflected higher average funds under management and increased revenue from both the annuities portfolio and direct asset management.
It said that this had been partially offset by a deterioration in lapse experience.
The announcement said adviser numbers in the aligned channel had increased by 82, and the business continued to undertake significant investment including the relaunch of key products in both the investment and insurance businesses.
NAB Wealth's divisional report noted that its market share had declined slightly in retail investments and insurance, reflecting a competitive environment.
It said NAB Wealth had "continued to manage the trade-off between volume growth and profitability, and has recently refreshed its offering with repricing and the launch of new products to ensure it attracts advisers and customers".
Dealing with adviser numbers, the divisional report said adviser numbers "increased significantly in the aligned channel, as the business continues to attract advisers from competitors".
However it added, "salaried advisers decreased over the year as advisers with lower productivity left the business".
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