NAB 2.37% $27.65 national australia bank limited

News: NAB UPDATE 1-National Australia Bank's annual profit takes a hit on inquiry fallout

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    Nov 1 (Reuters) - National Australia Bank (NAB) (NAB) posted a 14.2 percent fall in annual cash earnings on Thursday as the country's fourth-largest lender grapples with the costs of compensating customers and a series of compliance failures.

    Cash earnings came in at A$5.70 billion ($4.0 billion) for the year ended Sept. 30, compared with a record A$6.64 billion profit over the same period last year. The result was slightly below an average estimate of A$5.76 billion in a Reuters poll of 6 analysts.

    Revelations of widespread malfeasance in a months-long quasi-judicial inquiry into the sector has put Australia's largest financial institutions under unprecedented scrutiny, raising the spectre of costly legal battles and tougher regulation ahead.

    NAB announced that it had recognised A$360 million in customer-related remediation charges in the second half of the year, after earlier announcing it was setting aside A$314 million for compliance costs and for refunding customers it overcharged.

    The Royal Commission has raised instances where we failed to treat customers with care and respect, the bank said in a statement.

    Chief Executive Officer Andrew Thorburn has said about 300 staff have been fired or have left the bank as a result of internal investigations into misconduct.

    The Melbourne-based lender also announced a final dividend of A$0.99 per share, the same as last year. Statutory net profit, which includes one-time gains and losses, rose 5 percent to A$5.55 billion.

    NAB added that it expects cumulative cost savings of at least A$1 billion by September 2020.

    Its business and private division reported a 3.6 percent drop in its half-yearly profit to A$1.43 billion.

    NAB reported an increase in its CET1 ratio to 10.2 percent as of Sept. 30, marginally short of the government mandated 10.5 percent by 2020. The bank also stated that its net interest margin was flat. ($1 = 1.4142 Australian dollars)

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