National Australia Bank may have been on a major acquisitions drive but its underlying performance still reflects the drag created by the global financial crisis with an increase in bad and doubtful debt and a 42.9 per cent decline in net profit.
In an announcement released to the Australian Securities Exchange today, NAB also revealed that its wealth management division, MLC, had struggled through this period, with cash earnings before investment earnings on shareholders retained profits falling 23.8 per cent to $311 million.
The company said volatile global investment markets had affected average funds under management, which had fallen by 19 per cent during the year, resulting in a 37.1 per cent decline in investment cash earnings.
The company claimed that its acquisition of Aviva, including its life insurance operations and discretionary investment platform Navigator, would add scale, efficiency and new capabilities to MLC, while the strategic alliance with Goldman Sachs JBWere, together with the addition of NAB Private Wealth, would enhance the group’s wealth management offering to high and ultra high-net-worth customers.
Commenting on the result, NAB chief executive Cameron Clyne described it as solid and based on revenue growth and good cost control.
“In a weak economic environment when confidence levels within financial markets were still fragile, we had to strike a careful balance between the various expectations of our shareholders, customers and the community,” he said.
Commenting specifically on the banking group’s wealth management initiatives, Clyne said the acquisition of Aviva and the proposed acquisition of 80.1 per cent of the Goldman Sachs JBWere private wealth management business would strengthen the scale, distribution and brand of the wealth management business.
