NAB profits plummet due to pandemic
National Australia Bank has revealed the extent of the financial damage caused by the coronavirus pandemic, with the major bank's cash profits sliding by 37 per cent.
Releasing its financial results for the 2020 financial year, the bank's cash earnings were $3.7 billion, a 36.6 per cent slump compared to the prior corresponding year.
NAB's annual statutory profit was $2.6 billion for the 12 months ending September 30.
NAB chief executive Ross McEwan said the operating environment within the country's banking sector remained highly volatile, noting recent rate cuts by the Reserve Bank would place downward pressure on NAB's revenue due to an expected reduction in interest income from loans.
"Our operating environment is evolving through the ongoing challenges and uncertainties associated with COVID-19," Mr McEwan said.
The head of Australia's largest business bank added that stimulus packages were supporting the economic recovery.
"While economic activity has been materially impacted, the significant stimulus for households and businesses provided in the federal budget, combined with an expected more complete reopening of domestic state borders, provide a bridge to economic recovery as support is reduced," Mr McEwan said.
The bank has issued a final dividend to shareholders of 30 cents per cent, a 64 per cent reduction compared to the prior year.
Credit impairment charges of $2.76 billion have also dragged down the bank's performance. It has also set aside $1.86 billion in provisions relating to the pandemic.
NAB's expenses rose 10.7 per cent, which is primarily related to costs associated with its operational overhaul strategy.
Originally published as NAB profits plummet due to pandemic