National Australia Bank Posts Profits

Submitted by Craig Strzelecki on 9 May, 2008 - 10:51

National Bank of Australia has reported an increase of 25.8% increase in its profits to 2.7 billion in the first half. The net income for the bank rose to AUD 2.69bn in 6 months ended March 31. The stocks were also traded at three months high in Sydney trading. NAB’s shares rose $12.4 or 4 percent to $32.24. The strong results were attributed to strong lending and deposit growth. It also included one time gain from Visa Inc.’s initial public offering.

“Our strong positions in business, agri-banking and wealth management in Australia, continued success with integrated financial solutions in the United Kingdom and solid growth from our nabCapital and New Zealand businesses, all contributed to this performance," Chief Executive John Stewart said. He also added that the worst may be over but it shall definitely not be a “V-shped recover”. The world debt markets could last till 2010. “"It's going to be more like a saucer, it's going to be long and bumpy and it will go into 2009, and perhaps 2010,'' he said.

He also added that the bank is taking a cautious approach to the immediate future. The bank’s senior management team is quite cautious about the volatility of the market. They expect the continuing economic instability may derail any hopes of share markets to book huge profits. He commented that although things have recovered and looked a little better since past few weeks, one cannot ignore the false dawns that market has witnessed before and things got worse once again.

NAB’s cash earnings also reflected a healthy growth of 8% to $2.237 billion. They were strengthened by good market earnings at its banking operations in the local as well as UK market. It wealth management arm MLC also contributed significantly to its cash earnings. Cash profits also rose to 6.9% to around 2.213 billion.

A divisional break down of the interim results reported that NAB had managed to increase its market share in deposits to 14.3% to 14.7%. These results also reflected a net increase of 13.9 percent at the local retail bank. This increase was before the central functions, income on returned earnings and distribution costs.

National Bank of Australia is the nation’s second biggest bank. It reported that although the economic growth is slowing, nevertheless, it was strongly supported by the boom in resources. NAB shall also hand over $800 million to buy an American bank as US economy further enters into recession. The share market also closed higher yesterday owing to the strong profit records reported by National Bank of Australia. ASX200 index also closed higher by 48.6 points or 0.86 percent.