The NAB posted a full year cash profit of $6.48 billion, an increase of 4.2% and within expectations.
The bank, after speculation that the payout to shareholders could be cut, kept its dividends unchanged at 99 cents a share fully franked.
However, statutory net profit fell 94.4% to $352 million, reflecting the loss on the sale of the Clydesdale Bank in the UK and 80% of NAB Wealth’s life insurance business.
Stripping out these one-offs, statutory net profit fell 5.6% to $6.42 billion.
Revenue from ordinary activities was down 1.7% to $18.122 billion.
And bad debt charges jumped by 7% to $800 million, mainly due to a small number of large company exposures.
Other banks are also feeling the pinch on loans turned bad. For the Commonwealth Bank, loan impairment expenses increased 27% to $1.256 billion in 2016.
Earlier this year the ANZ was estimated to have exposure to troubled legal firm Slater and Gordon ($300 million), steelmaker Arrium ($220 million), coal export terminal Wiggins Island ($259 million) and Dick Smith ($70 million).
At the NAB, the higher cost of funds flowed through to net interest margins which fell 2 basis points to 1.88%.
CEO Andrew Thorburn says NAB moves into 2017 a stronger, simpler and focused business.
“NAB is well positioned to deliver improved customer outcomes and attractive returns for shareholders in the year ahead, with a clear plan and the right organisational structure in place,” he says.
Australian Banking cash earnings increased 7% to $5.472 billion from stronger performance by markets and treasury combined with higher volumes of housing and business lending.
NAB wealth cash earnings increased 13% to $356 million reflecting stronger revenue and lower expenses.
The NAB is the first of three big banks to report full year results over the next ten days.
The 2016 results in detail:
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