Cash profit at NAB dropped 16% to $2.76 billion for the half year as restructuring costs weigh on the bank.
Without restructuring charges, the result was flat at $3.29 billion. Statutory profit was up 2% to $2.58 billion.
The bank announced it was exiting wealth management business MLC via an ASX listing or a trade sale, a process expected to take until the end of 2019. MLC has assets under management of $199 billion and 3300 staff.
However, NAB is keeping JB Were to help high net worth customers manage their money.
“We are announcing changes to our wealth management strategy, consistent with our plan to become simpler, faster and focused on core banking,” says NAB Chief Executive Officer Andrew Thorburn.
“A detailed review, conducted over nine months, determined we could best serve the needs of our customers and deliver long term value for our shareholders by retaining and investing in a more focussed wealth offering.
“We intend to exit our Advice, Platform & Superannuation and Asset Management businesses, currently operating under MLC and other brands.
“Independent ownership will allow for this business to determine its own strategy and investment priorities to better deliver for customers and enhance its competitive position.”
The NAB bought MLC, which has about 1100 financial advisers, in 2000 for $4.65 billion.
Thorburn says the acceleration of strategy announced at the 2017 full year results, including an estimated additional $1.5 billion investment over three years, is underway.
“We are improving the experience of our customers, reshaping our workforce and growing our bank in an environment of rapid technological and regulatory change,” he says
“This is an ambitious and necessary plan so we can continue to deliver for all our stakeholders, live our purpose to ‘back the bold who move Australia forward’ and achieve our vision to be Australia and New Zealand’s most respected bank.”
He told a media briefing that banking was seeing unprecedented times.
“I think at NAB we have got the right plan,” he says.
“The complexity in the bank is just killing us and we need to simplify.”
NAB says 1,050 employees had left the bank by the end of April, against a target of 6,000 by the end of the 2020 financial year.
The bank declared a flat dividend of 99 cents a share.
Results in detail:
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