News: NAB UPDATE 1-National Australia Bank annual earnings slide, asset quality to worsen

(Adds details on margin outlook, provisions for asset quality deterioration)

Nov 5 (Reuters) - National Australia Bank (NAB) on Thursday posted a 36.6% fall in annual profit, hurt by provisions for higher loan losses due to the COVID-19 pandemic, and said it expects asset quality to deteriorate further in the coming days.

Lenders across the world have been severely hit by the pandemic, as record low interest rates aimed at boosting economic growth has hurt margins, while long loan repayment holidays and increased defaults due to a rise in unemployment have added to troubles.

Australia's third-largest bank posted full-year cash earnings of A$3.71 billion ($2.66 billion), compared with a restated figure of A$5.85 billion last year. Analysts polled by Reuters on average expected cash earnings of A$3.82 billion.

The lender said it had booked A$1.86 billion in additional forward looking collective provisions in fiscal 2020, as it expects asset quality to deteriorate further.

NAB also said likely sustained low interest rate environments in Australia and New Zealand will impact the group's net interest margin by about 6 basis points in fiscal 2021.

NAB's result took an added hit from provisions for customer remediation for improper advice given in the past to customers at its wealth management unit, MLC Wealth, which it agreed to sell to IOOF Holdings earlier this year.

The company declared a final dividend of A$0.30, compared with last year's payout of A$0.83 per share.

($1 = 1.3937 Australian dollars)