The big four bank’s cash earnings have taken a significant hit due to restructuring-related costs and customer-related remediation announced earlier this year.
In announcing its full results to the ASX yesterday, NAB’s cash earning’s totalled $5.7 billion, down 14.2 per cent from FY2017.
Last month, NAB announced it would pay out $314 million to customers impacted by its wealth business, something it said would reduce cash earnings by an estimated $261 million and earnings from discontinued operations by an estimated $53 million.
Further, NAB was hit by restructuring-related costs of $755 million in 1H18 primarily related to costs associated with workforce reduction.
In FY18, around 1,900 full-time employees left NAB against its target of 6,000 by FY20.
Excluding NAB’s restructuring-related costs and customer-related remediation, cash earnings would’ve been $6.49 billion, down 2.2 per cent from FY17.
It noted that this was due to a higher investment spend as it accelerates investment to transform its business.
NAB chief executive Andrew Thorburn said that, since announcing the restructuring of its wealth business, it has made good progress towards separating MLC ahead of a targeted public market listing by the end of the 2019 calendar, including the appointment of Geoff Lloyd as the MLC chief executive.
“We are operating in a challenging environment and remain alert to risks. The royal commission has raised instances where we failed to treat customers with care and respect,” Mr Thorburn said.
“We are determined to put things right and are taking steps to build a better bank.”