BNZ
18/08/2014 13:04
QUARTER
REL: 1304 HRS Bank of New Zealand
QUARTER: BNZ: NAB 2014 Third Quarter Trading Update
NAB 2014 Third Quarter Trading Update
Satisfactory performance despite challenging environment
Unaudited cash earnings rose to approximately $1.6 billion, which is 7% up on
the prior corresponding period and around 2% above the quarterly average of
the March
2014 Half Year result.
Business Commentary
Australian Banking cash earnings were broadly flat over the quarter with
lower markets income offsetting continued good growth in mortgage lending and
further falls in B&DD
charges. Over the quarter home loan balances grew at an annualised rate of
8.5%. Growth in housing lending during the period represented 1.1x system.
Business lending balances
grew at an annualised rate of 5.5% over the quarter with the growth strongest
in Institutional lending. On an APRA basis, growth in business lending during
the period represented 0.8x
system.
NAB Wealth cash earnings increased over the quarter benefiting from improved
insurance claims results while lapses remained stable and the impact of
higher FUM was offset by a
mix change to lower margin wholesale investment business in the period.
NZ Banking local currency cash earnings rose over the quarter due to higher
revenue from increased loan volumes and lower funding costs. Expenses were
well managed while B&DD charges were stable.
UK Banking local currency cash earnings were lower in the quarter. Continued
strong growth in the mortgage book and a lower charge for B&DDs was offset by
a lower net interest margin largely reflecting timing of the Financial
Services Compensation Scheme(FSCS) levy.
NAB UK CRE run-off portfolio reported a modest loss in the third quarter,
which included a 6 million B&DD charge and no change to the NAB UK CRE
overlay balance. The portfolio
continues to decline with the balance reducing over the quarter from 3.3
billion to 3.0 billion. As announced on 28 July, NAB has agreed to sell a 625
million portfolio of mainly impaired loans for a small gain above the net
book value, with these loans derecognised from NAB Group's balance sheet on
that date.
Great Western Bank local currency cash earnings were lower over the quarter
primarily due to revaluation of foreclosed properties and lower releases of
provisions for B&DDs. The
business remains fully deposit funded and asset quality indicators have
improved.
End CA:00253996 For:BNZ Type:QUARTER Time:2014-08-18 13:04:11
