National Australia Bank's H2 cash earnings to take $188 mln hit By Reuters

Australia Q3 GDP slightly misses expectations as exports shrink

National Australia Bank's H2 cash earnings to take $188 mln hit

Published Oct 23, 2020 11:27

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National Australia Bank's H2 cash earnings to take $188 mln hit

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Oct 23 (Reuters) - National Australia Bank NAB.AX said on Friday its second half cash earnings will take a A$264 million ($188 million) hit from provisions for customer and payroll remediation and an impairment of property assets.

The charges will reduce net profit by A$450 million, with NAB's decision to offload MLC Wealth, the wealth unit it is selling to IOOF Holdings IFL.AX , trimming the cash earnings hit.

NAB said around 65% of A$266 million after tax set aside for customer remediation is linked to MLC Wealth. Another A$90 million has been set aside for payroll, including long-term overpayment and underpayment issues. An A$94 million impairment charge for property assets takes into account changes linked to more employees working remotely.

Cash earnings is a closely watched measure of performance for banks as it strips out unusual items.

Australia's No.3 lender said the provisions and impairment costs will reduce the bank's common equity tier 1 (CET1) ratio by 15 basis points.

The bank is due to report full year results on November 5.

($1 = 1.4033 Australian dollars)

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