Cut in bad debt spurs profit at National Australia Bank

THE PARENT company of Yorkshire and Clydesdale banks has increased second-half cash profit by 17 per cent as bad-debt charges fell and mortgages grew at more than three times the rate of the industry.

National Australia Bank said this morning that profit was a record A$2.79bn (£1.82bn), despite doubts over the immediate health of the global economy. Chief executive Cameron Clyne said: “Business credit and consumer credit are functions of confidence and obviously it has been low. It has led to lower credit growth.”

NAB has grown loans 7.6 per cent in the year, mainly due to its aggressive mortgage focus. It also said net interest margin, a key measure of profitability, rose five basis points in the second half to 2.28 per cent.

Bad-debt charges fell by A$199m and Tier I capitalclimbed 79 basis points to 9.70 per cent.

NAB has long considered an exit from the UK and rejected a bid for its British assets by Hugh Osmond’s Sun Capital before entering into its current talks with NBNK. NAB said underlying profits in UK banking rose four per cent to £533m and pre-tax cash earnings rose 45 per cent to £237m in a “very difficult” environment.

• All trading on the Australian Stock Exchange was halted this morning as it probed a “technical glitch”.