National Australia Bank Ltd. (ASX: NAB) has reported its half year (HY) result for the six months to 31 March 2018.
National Australia Bank is one of Australia’s biggest companies and one of Australia’s major banks. It also runs the online bank Ubank.
Here are some of the highlights from NABs HY report:
- Cash profit (a bank’s preferred profit measure) down 16%
- Cash profit per share, excluding ‘restructuring costs’, down 2%
- Net interest margin, a key bank statistic comparing the interest rate margin it makes on its loans against deposits, was down slightly to 1.87%
- Dividend flat at 99 cents per share
- Reported profit up 2%
NAB CEO, Andrew Thorburn, made a point to comment about the Royal Commission, he said: “We continue to learn from our mistakes and respond by making changes to be better for customers. The commitment of our people to doing the right thing is unwavering and together we are working to restore trust and respect in our industry, during and after the Royal Commission.”
NAB was pleased to say that its Net Promoter Score, a gauge of customer loyalty, was up by 3 points compared to -9 in September 2017 and it’s currently first among the other major banks of Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ).
The bank also said that it is expanding its role with small businesses by working with Xero Limited (ASX: XRO) to enable customers to make payment instructions in Xero to NAB accounts.
NAB is currently in the process of reducing its team by 6,000 people in a bid to reshape its workforce. By the end of April, around 1,050 employees had left NAB. However, the bank said it is targeting 2,000 new roles and it has invested $50 million to help people with career and wellbeing services.
Outlook
NAB’s board expect to maintain the final FY18 dividend at the same level of 99 cents. Management also expect that FY18 expenses could grow by 5% to 8% as a result of accelerated investments.
NAB intends to exit its advice, platform & superannuation and asset management businesses, which operate under the banner of MLC. It is considering listing MLC on the share market to achieve the separation.
According to NAB, The Australian and New Zealand economies remain supportive of solid growth.
We have delivered a solid 1H18 result as we manage NAB for today while transforming for the future. – Thorburn
NAB shares are down 0.8% in early trade on Thursday, according to Google Finance.
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