Wealth management big contributor to NAB result
National Australia Bank’s (NAB’s) wealth management arm, MLC, has made a key contribution to the banking group’s 63.2 per cent increase in net profit to $4.442 billion for the year to the end of September.
The profit surge, which the company’s announcement did not trumpet, came on the back of a 19.3 per cent increase in cash earning. NAB chief executive Cameron Clyne said that business banking, MLC and NAB Wealth had been key contributions — together with an improvement with respect to bad and doubtful debts.
“MLC and NAB Wealth performed well, with leading retail superannuation and insurance market share, strong net inflows, increased adviser numbers and good underlying cost management,” he said.
Clyne said that cost synergies from the integration of Aviva were well ahead of business case expectations, and that underlying business momentum remained strong.
Drilling down on the performance MLC and NAB Wealth, the banking group’s announcement to the Australian Securities Exchange (ASX) revealed that cash earnings had increased by 32.9 per cent to $549 million.
The results document extolled the virtues of MLC and NAB Wealth’s shift to fee-for-service and claimed all of MLC advice businesses were now operating under a fee-for-service model for investment and superannuation customers.
“There has also been a significant increase in advisers interested in joining MLC and NAB Wealth, with 100 new practices agreeing to join in the past 12 months,” it said.
“nabInvest, which utilised MLC and NAB Wealth’s capabilities to identify quality asset managers, now has equity in seven asset managers,” the ASX announcement said. “Attractive asset management investments continue to be considered to increase MLC and NAB Wealth’s presence in direct asset management, particularly in areas of global equities, infrastructure and property.”
In discussing the bank’s outlook in the ASX announcement, Clyne made no reference to the failed bid to acquire AXA Asia Pacific but said “in 2011 the focus will remain on delivering further progress against our strategic agenda”.
AUTHOR
Mike Taylor
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