NAB profit drops 51pc, cuts dividend and seeks $3.5b from investors
In an extremely unusual move, National Australia Bank has reported its results to the ASX almost a fortnight early as it seeks an extra $3.5 billion of investment from shareholders.The single-biggest factor in that decline was an almost $1.2 billion increase in the money the bank set aside to cover future losses from bad debts, with more than $800 million directly related to COVID-19 effects.
There was a further $1 billion in write-downs to a change in the way the bank accounts for the cost of its software. However, the results for the half year ending on March 31 are yet to reflect the full fallout from COVID-19 and the shutdowns and social distancing that have crippled large sections of the Australian economy.
In fact, NAB's preferred measure of cash earnings showed a 26 per cent increase in profit from its consumer-banking division, while business banking profits were only down 5.7 per cent by the end of March. The biggest COVID-19-related hit to earnings in the March quarter came from the steep falls and volatility on global markets, which knocked 10 per cent off the bank's corporate and institutional banking profits.
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