NAB
A National Australia Bank sign is seen behind a street sign in Sydney's central business district October 21, 2008. National Australia Bank, the nation's top lender, reported a major jump in bad-debt charges on Tuesday and warned of tough times ahead, with Australian growth slowing and key offshore markets in recession. Reuters/Tim Wimborne

National Australian Bank has shown a profit record of around $6.34 billion, which is 19.7 percent more than the gain recorded in financial year 2014. The bank said that the increase in the revenue in 2015 has lifted its full-year result.

Besides announcing its profit, the bank also confirmed it has further plans to sell its unprofitable U.K. business, including Clydesdale and Yorkshire Bank. “We will have exited all our low returning offshore businesses, allowing us to fully focus on serving our priority customer segments and leveraging the investments we have made in Australia and New Zealand,” said NAB chief executive Andrew Thorburn.

NAB also confirmed selling off 80 percent of its life insurance divisions to Japan’s Nippon Life Insurance Company worth $2.4 billion. “Our wealth business has delivered significantly improved results since 2013, which has enabled us to secure the long-term partnership we are announcing today,” Thorburn said. “This partnership will enable us to continue to deliver insurance solutions to our customers while improving wealth returns for shareholders.”

Cash earnings of NAB increased by $784 million or 15.5 percent, making the amount reach $5.84 billion, which was less than $6.26 billion as per the expectations of the investors. The investors will receive a fully franked final dividend of 99 cents per share on the register on Nov. 9.

Though the bank recorded a significant profit, it was quite less than what the pundits expected. According to analysts, the net profit expected was in excess of around $7 billion. “I’ve got it down as a pretty big miss,” OptionXpress analyst Ben Le Brun told Sky News. Le Brun said that whatever productivity NAB has shown is satisfactory and the market will feel better and happy after such a net profit record.

After the recent turmoil faced by the banking sector where four major banks - Commonwealth Bank, Westpac, Nab and ANZ Bank - lifted up their mortgage interest rates, NAB’s significant profit earning is a good news for the banking sector.

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