AXA Asia Pacific Holdings says it expects first-half operating earnings to rise 5.7% as it continues discussions with the National Australia Bank.

But will the lacklustre first half earnings for Axa Asia Pacific Holdings now kill the deal with NAB?

It would seem not as NAB continues to talk about a successful conclusion to its long-running ambitions to own the local arm of Axa.

Axa and NAB revealed at the start of this week that they, and Axa's French parent, had extended an exclusive negotiating period until August 31.

And then yesterday's trading update from Axa confirmed the fund manager's exposure to markets strong or weak.

Last year it rode the rebound from March onwards, especially in Asia, after reporting very poor results in the market slide in 2008.

The June 2010 half year has seen the 2008 woes return after a strong March quarter.

The worries about Europe caused markets to tank in the June quarter and that will see the 5.7% rise in operating earnings translated into a 19% fall in after tax profits.

Axa said that profit after tax before investment experience and non recurring items will be approximately $285 million (2009 - $267.0 million).

"Profit after tax before investment experience and non recurring items comprises Group Operating Earnings, normalised investment earnings of $80 million (2009 $75.0 million) and group corporate costs of approximately $(65) million (2009 - $(63.5) million).

"Profit after tax and non-recurring items of approximately $220 million (2009 - $270.4 million).

"Profit after tax and non recurring items includes negative investment experience of approximately $(60) million (2009 - $(19.6) million) reflecting investment markets in the first half of the year and non recurring items of approximately $(5) million (2009 - $23.0 million)."

Axa APH also said that it intended to pay an interim dividend to shareholders of 9.25c per share, confirming an announcement made on Monday.

NAB is trying to gain approval from the ACCC, which has expressed concerns that NAB would have too much power in the wealth management, and particularly the investment and funds management platform market, if the deal is given the OK.

Axa said its earnings estimate was subject to review by auditors and it would be announcing the results on August 4.

Axa shares were up 12c at $5.39 yesterday.

Nab shares finished down 20c at $24.20.

And Amcil, the third listed investment company associated with Australian Foundation Investment Co (AFIC), has revealed a 29% rise in full year earnings, thanks to what it called positive investment returns.

Net operating profit for the 12 months ended June 30, 2010 was $4.9 million, compared to the previous year's figure of $3.8 million, Amcil said yesterday.

"This increase was a result of moving closer to being fully invested during the period," the company said in a statement on Wednesday.

"Over the period there was also a positive turnaround in contribution from the trading portfolio."

But the company's net profit was $7 million, down 28% from the previous year's net profit of $9.7 million, re-stated following changes to accounting standards.

"Last year's profit figure included $6.1 million of realised gains from the sale of some of the company's investments," the statement said.

"Realised gains made after the change in accounting standards are no longer included as part of profit."

Revenue from ordinary activities, excluding capital gains, rose 22.1% to $6.2 million.

The result echoes results from stablemates Mirrabooka last week and Djerriwarrh on Monday. AFIC reports next Monday.

Amcil shares were up 1.5c, or 2.4%, at 64c.