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Half Yearly Report/ASIC Half Yearly A/Cs

NATIONAL AUSTRALIA BANK LIMITED 2002-05-09 ASX-SIGNAL-G

HOMEX - Melbourne

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REPORT OF THE DIRECTORS

The directors of National Australia Bank Limited (hereinafter
referred to as "the Company") present their report of the Group,
being the Company and its controlled entities, for the half-year
ended 31 March 2002 and the independent auditors' review report
thereon.

BOARD CHANGES

Dr J Brian Clark and Mr Peter JB Duncan were appointed as independent
non-executive directors in October and November 2001 respectively.

DIVIDENDS

The Directors have declared an interim dividend of 72 cents per
ordinary share, fully franked, payable on 3 July 2002.

The extent to which future dividends will be franked, for Australian
taxation purposes, will depend on a number of factors including the
proportion of the Group's profits that will be subject to Australian
income tax and any future changes to Australia's business tax system
as a result of the Australian Governments tax reform initiatives.

ROUNDING OF AMOUNTS

Pursuant to Class Order 98/100 made by the Australian Securities and
Investments Commission on 10 July 1998, the Company has rounded off
amounts in this report and the accompanying financial statements to
the nearest million dollars, except where indicated.

GROUP'S RESULTS

The net profit attributable to members of the Company for the Group
for the half year ended 31 March 2002 was $2,256 million, 11% higher
than the March 2001 half year. Earnings attributable to ordinary
shareholders (after distributions to holders of National Income
Securities and Trust Units) rose by 13% from $1,913 million for the
March 2001 half year to $2,161 million.

REVIEW OF OPERATIONS

Financial highlights for the period compared to the prior
corresponding period included: Profitability

* Cash earnings of $1,972 million up 8% from the March 2001 half year

* Cash earnings from Australian operations contributed $1,126
million, or 57% of Group cash earnings

* Net interest income increased 6% to $3,603 million

* Net interest margin improved 5 basis points to 2.71%

* The charge to provide for doubtful debts increased 2% to $417
million

EARNINGS

* Earnings per share growth of 11% to 139.0 cents per share

* Cash earnings per share growth of 6% to 126.8 cents per share

* Return on shareholders funds was 20%

* Dividends per share increased 7.5%

The movements from September 2001, to March 2002 are:

* Underlying growth of 0.2 % in total assets in local currency terms

* Movements in exchange rates decreased total assets by $14 billion

* Gross loans and advances increased 3.7% in local currency terms

* Funds under management and administration increased 9% to $70
billion

* Assets under custody and administration was up 4% to $359 billion

HomeSide Lending, Inc (HomeSide) completed the sale of its operating
platform and operating assets to Washington Mutual Bank, FA
(Washington Mutual) as at 1 March 2002. The sale was completed in
accordance with the 12 December 2001 agreement between Washington
Mutual, HomeSide and others. Under the terms of the sale, HomeSide
received cash for A$2,299 (US$1,184) million of operating assets,
which consisted primarily of A$2,081 (US$1,072) million in warehouse
and pipeline mortgage loans. The purchase price remains subject to
final adjustment in accordance with the 12 December 2001 agreement.
HomeSide still retains the mortgage servicing rights (MSR) and
related financial hedges. Following the sale, HomeSide is no longer
producing MSR and the book value will runoff through natural
attrition and bulk sales. The sale of the operating platform and
operating assets was made at a premium of A$49 million (US$25
million) to the US generally accepted accounting principles (GAAP)
book value of the net assets sold. Under Australian GAAP, the premium
was slightly higher at A$52 million. After allowing for transaction
costs and triggered costs, primarily employee liabilities, a loss of
A$19 million (US$10 million) was recorded under Australian GAAP.

Signed in accordance with a resolution of the directors.

DCK Allen FJ Cicutto
CHAIRMAN MANAGING DIRECTOR