National Australia Bank (NAB) has reported cash earnings of A$1.6bn for the first quarter (Q1) ended 31 December 2016, down 1% compared to A$1.7bn a year ago and also down 1% from the quarterly average of the September 2016 half year figure.
On a statutory basis, the bank's net profit attributable to the owners, however, rose to A$1.6bn from A$1.5bn in the prior year.
NAB said that its revenue was up by 1%, driven by growth in lending as well as higher trading income. Expenses increased 5%, mainly due to higher personnel costs under its enterprise agreement, and redundancy payments to employees.
The charge for bad and doubtful debts during the period slumped 23% to A$164m.The bank attributed the decrease to the non-repeat of the increase in the collective provision overlay for mining, mining related and agricultural sectors in the September 2016 half year.
The group’s common equity tier 1 (CET1) ratio at 31 December 2016 stood at 9.5%, compared with 9.8% at 30 September 2016. The decrease reflected the impact of the final 2016 dividend declaration, the bank said in its trading update.
NAB Group CEO Andrew Thorburn said: “We have made a solid start to 2017 with our ongoing focus on high returning, priority customer segments continuing to deliver. Our revenue is up, asset quality is again a strength and our capital position remains sound.
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“We are taking a disciplined approach to reshaping our business, balancing higher levels of investment with tight cost management, to become more efficient and to serve customers better. Our first quarter expenses were impacted by the usual 1 October salary increases as well as elevated redundancy costs. Our FTE levels reduced by 488 in the quarter and for this full year we remain on track to deliver more than $200 million in productivity savings and continue to target positive ‘jaws’.”