NAB reports lower cash earnings
National Australia Bank (NAB) has reported cash earnings of approximately $1.6 billion, three per cent lower than for the same period last year in a third quarter trading update released to the Australian Securities Exchange (ASX) today.
At the same time, NAB chief executive, Andrew Thorburn has sought to explain the banking group's decision not to fully pass on the recent Reserve Bank of Australia rate cut by pointing to the company's need to meet higher funding costs.
"These higher funding costs contributed to our decision to not pass on all of the most recent RBA interest rate cut to home loan borrowers," he said. "The decision reflects the responsibility we have to balance the needs of all stakeholders — borrowers, depositors and our 584,000 shareholders.
The trading update also noted that the charge for bad and doubtful debts for the quarer rose 21 per cent to $228 million with the increase largely reflecting the non-recurrence of the unusually low bad and doubtful debt charge in the first quarter of 2016 and an increase in the mining and argriculture collective provision overlay.
The banking group sought to use its third quarter trading update to state that the sale of 80 per cent of its life insurance business to Nippon Life remained on track for completion in the second half of the current calendar year.
It noted that an important milestone in that process had been reached on 1 July with the merger of five superannuation funds to create Australia's largest retail super fund with approximately $70 billion in funds under management.
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