If LEH gets bailed out or taken out this weekend then out of the big 4, NAB should have the biggest upside. If there is a write its already factored in the current SP (article below), if there is a write back then who knows what will happen :)
Half yearly distribution 0f 90+ cents fully franked confirmed to remain unchanged too.
National Australia Says Provisions Are `Appropriate' (Update1)
By Stuart Kelly
Sept. 12 (Bloomberg) -- National Australia Bank Ltd. said it doesn't need to set aside money for potential losses on investments in corporate debt and securities backed by commercial loans after increasing provisions fivefold this year.
The country's biggest bank by assets is under pressure as analysts, including Craig Williams at Citigroup Inc., estimate the company may boost provisions by as much as A$1 billion ($803 million). That's more than double the A$830 million that the Melbourne-based bank set aside for potential losses from its U.S. mortgage-backed investments in July, cutting fiscal 2008 profit by almost A$600 million.
``We believe we have made an appropriate level of provisioning,'' Brandon Phillips, a spokesman for the bank, said in an interview today. ``If there is any change that justifies an adjustment to our provisioning, then we will inform the market.''
Australian banks face declining profits amid a slowing economy, and as bad debts increase amid the global credit crisis. National Australia, which in July said it would replace its chief executive officer, is the nation's biggest loser from the crisis that's sparked more than $500 billion in writedowns and credit losses at the world's largest banks and securities firms.
National Australia's shares gained 0.1 percent to A$23.90 as of 10:49 a.m. in Sydney, paring their slide this year to 37 percent. The seven-company S&P/ASX 200 Banks Index dropped 28 percent in 2008.
Citigroup's Williams said on Sept. 10 he remained ``cautious'' of National Australia's estimate that it faces no further writedowns against A$4.5 billion of investments in its so-called conduits.
Bank units known as conduits or structured investment vehicles use short-term loans to finance investment in longer- term securities such as asset-backed bonds. The profit usually delivered from this strategy is being cut by rising borrowing costs.
`Apparent Deterioration'
National Australia's conduit investments include A$1.6 billion in corporate collateralized debt obligations that ``may be as little as half of face value,'' Williams said in a note to clients.
``While as an outsider it is difficult to dispute the bank's position, the apparent deterioration of the value of the instrument is such that we do not share this view,'' he said. ``We maintain our view that impairment may be determined and that further writedowns on these assets are possible.''
Jonathan Mott of UBS AG expects a further A$450 million in writedowns in fiscal 2009, according to a Sept. 2 note. JPMorgan Chase & Co.'s Brian Johnson on July 25 said he expected further provisions, without being specific.
Williams raised his recommendation for National Australia shares on Sept. 2 to ``hold'' from ``sell,'' saying investors have already factored the potential writedowns into the stock price.
The bank has struggled to win back investor confidence after a currency trading scandal in 2004 and $2.2 billion of writedowns from the acquisition of Florida-based mortgage company HomeSide Lending Inc. The company sold HomeSide to Washington Mutual Inc. in 2002 after the writedowns ended eight years of record profits.
NAB Price at posting:
$23.73 Sentiment: ST Buy Disclosure: Held
(20min delay)