NAB Wealth claims improvements, despite lower FUM

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NAB has pointed to an improvement in the quarterly performance of its wealth management division, despite lower funds under management.

“Excluding IoRE, NAB Wealth results improved in the quarter despite lower funds under management (FUM). Underlying investment margins remained stable. Premiums in-force increased in the insurance business at a comparable rate to prior periods and net claims were stable in the quarter,” said the bank’s 2012 Third Quarter Trading Update.

Overall, the NAB statement noted that, on a statutory basis, unaudited net profit attributable to the owners of the company for the June quarter was approximately $1.2bn.

Quarterly highlights included:

  • Unaudited cash earnings were stable at approximately $1.4 bn. The main difference between statutory and cash earnings was charges relating to the restructure of UK Banking announced on 30 April 2012. On a cash earnings basis:
  • Revenue was down around 1% reflecting higher UK funding costs and lower Markets and Specialised Group Assets (SGA) revenue. Income from Personal Banking grew strongly;
  • The charge for bad and doubtful debts (B&DDs) for the quarter was $524 million, down $42 million or 7%. Small reductions in the charge across a number of business units were partially offset by an increased charge in Business Banking;
  • Expenses were lower reflecting disciplined expense management. The Group remains focused on balancing investment in core infrastructure projects with sustainable productivity improvements.

“NAB delivered a stable result for the quarter and made further ground against its strategic agenda to strengthen the Australian franchise, which has been the group’s unwavering focus since 2009”, said NAB CEO Cameron Clyne.

“This quarter’s result is set against a backdrop of ongoing challenges in the global economy with continued uncertainty in the Eurozone and the United States, volatility in global financial markets, and slowing growth in the big emerging economies. Although subdued business and consumer confidence continue to affect the Australian economy, we remain positive about the outlook.

“The Australian franchise remains a strategic priority and again produced some pleasing results in Personal Banking, while maintaining a strong position in business banking.

“The Group’s commitment to enhance and strengthen reputation produced good outcomes during the quarter. In June 2012 NAB was ranked number one for customer satisfaction among the major Australian banks for the third month in a row. Personal banking customer numbers, revenue and earnings increased during the quarter.

“The group maintained its focus on balance sheet strength and continues to carefully manage its cost base.”

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