NAB increases full-year profit

National Australia Bank Ltd (NAB) has posted a solid lift in full-year cash profit on the back of lower bad and doubtful debts and stronger earnings across most of its businesses.

In the year to September 30, NAB posted a cash profit of $5.94 billion, an increase of 9.3% on the $5.43 billion recorded in the previous year.

Net profit was $5.45 billion, a 33.6% lift on the previous year's $4.08 billion.

The lender said difference between net profit and cash earnings was primarily due to fair value and hedge ineffectiveness, the effects of adjusting for treasury shares and a $163 million (post-tax) provision raised for costs associated with UK payment protection insurance (PPI).

In the same period net operating income was $18.58 billion, a 2% increase on $18.22 in the previous corresponding period.

The lender declared a fully-franked final dividend of 97 cents to be paid to shareholders on the register at November 13.

Combined with NAB's interim dividend of 93 cents, the lender paid a total fully-franked dividend for the year of $1.90.

In the year, NAB's total bad and doubtful debts (B&DDs) charge was $1.19 billion, a reduction of $681 million on the previous year, which the lender attributed to improved asset quality trends, particularly in the UK businesses and business banking. 

NAB noted that operating expenses increased by 4.4% over the year, but said that included Australian restructuring costs associated with the move to a new operating model, and additional charges for UK conduct-related matters other than PPI.