National Australia Bank has lifted its cash profit seven per cent during the June quarter as lower costs offset a slide in revenue.
The bank made a cash profit of $1.6 billion for the three months to June 30, up from $1.5 billion a year ago.
Net profit, which includes one-off items, was $1.7 billion for the quarter, unchanged from a year ago.
New chief executive Andrew Thorburn said the result was “satisfactory”.
“While revenue growth remains challenging, Australian home lending continues to achieve market share gains and Australian business loan growth improved in what is traditionally a stronger quarter,” he said.
NAB’s revenue slid one per cent after a lack of volatility in share markets hurt the bank’s markets business.
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Expenses were down six per cent, but were flat once costs linked to troubled UK business were excluded.
The charge for bad and doubtful debts fell nine per cent to $241 million.
Meanwhile, NAB said it would need to make additional provisions of at least 245 million pounds ($A447.20 million) in relation to misconduct issues in its UK business.
The bank said an additional provision of at least 170 million pounds ($A310.30 million) would be required in relation to interest rate hedging products and another 75 million pound ($A136.90 million) provision would be made due to cover increased costs in its payment protection insurance remediation program.
Earnings from the bank’s Australian business were flat after the lower markets income offset the growth in home lending and lower bad debts charges.
NAB Wealth lifted earnings due to improved results from its insurance claims business while the bank’s New Zealand division also lifted earnings thanks to increasing loans volumes and lower funding costs.
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But earnings from the UK business fell as a slide in the division’s net interest margin offset an increase in home lending and lower bad debts.
In other financial results announced today, Australia’s largest freight operator, Aurizon, posted a 43 per cent fall in full year net profit on the back of previously announced impairments.
Net profit for the 12 months to June 30 was $253 million, down from $447 million in 2012-13.
Underlying net profit – excluding nearly $390 million in write-downs – was up seven per cent to $523 million.
The weak coal market and subsequent cancelled capital projects was blamed for the various impairments announced over the last year.
These included transformation-related asset impairment costs of $190 million, other asset impairment costs of $127 million and voluntary redundancy program costs of $69 million.
There were 410 job cuts in the 12 months and 2,100 job cuts or 22 per cent of the workforce since November 2010 when the company was first listed on the stockmarket.
Revenue was up two per cent to $3.8 billion on the back of stronger iron ore and coal volumes, with general freight volumes down six per cent, chief executive Lance Hockridge said.
Protective clothing and condom maker Ansell has suffered a 70 per cent slide in its full year profit due to costs linked to the restructure of its operations.
Ansell made a net profit of $US41.8 million ($A45.23 million) in the year to June 30, down from $US139.2 million ($A150.61 million) a year ago.
