NAB Wealth was hit by higher insurance claims, forcing a $61million (8%) decrease in its net operating income from March 2012. There was a $56m decrease in the sector’s operating income from the September 2012 half.
Operating expenses increased by $1m over the past 12 months to support the launch of new products such as nabtrade, and to keep up with compliance and regulatory expenses. During the half year from September 2012 operating expenses were flat.
The bank cited the re-classification of sales incentives for JBWere from ‘operating expenses’ to ‘volume related expenses’ as a key factor in the shift of numbers.
Adviser numbers were up from March last year, but decreased from September as “underperforming advisers left the business”. There are now 1,868 aligned and salaried advisers with NAB.
Higher insurance claims and lower annuities profits were again to blame for a $3m decrease in cash earnings before IoRE and non-controlling Interest from September 2012.
Funds under management increased by $13.2b or 10.7% but insurance cash earnings were $45m lower than the March 2012 half year due to “a deteriorating claims and lapse experience, reflecting difficult industry conditions”.