NAB makes ‘substantial progress’ on UK exit

David Duffy.
David Duffy.
0
Have your say

NATIONAL Australia Bank today said it had made good progress on its strategic priorities over the third quarter.

Unaudited cash earnings were approximately 1.75bn Australian dollars, which is approximately nine per cent up on the prior corresponding period and approximately six per cent above the quarterly average of the March 2015 half year result.

“This is a good quarterly result with continuing momentum in our Australian and New Zealand business, improvements in asset quality and further progress made towards addressing legacyissues,” NAB Group CEO Andrew Thorburn said.

“Over this period we have maintained a clear focus on our core Australian and New Zealand business.”

He added: “Substantial progress has also been made on our intention to pursue a demerger and IPO of Clydesdale Bank over the last three months and we will provide the market with a detailed update of the proposed transaction at our 2015 full year results.”

The statement added: “At the March 2015 half year results announcement NAB provided an update on UK customer conduct matters including the requirement by the UK Prudential Regulation Authority (PRA) for NAB to provide £1.7bn capital support to Clydesdale Bank in relation to potential future legacy conduct costs to achieve the proposed demerger and IPO of that business.

“The update also disclosed the ongoing significant risk and uncertainty in determining costs associated with conduct related matters as a contingent liability of the group. Since the release of the March 2015 half year results Clydesdale Bank has continued to operate its remediation programme, including progress on the past business review and any consequent need to undertake further proactive customer contact.

“Based on the work undertaken to date, which is ongoing and remains incomplete, it is currently expected that an additional provision in respect of payment protection insurance will need to be recognised in finalising the group’s 2015 full year accounts and that the provision may be in the range of £290m to £420m, primarily driven by increased costs to run the remediation programme and impact of the past business review.

“In relation to interest rate hedging products, based on current redress calculations for completed reviews, and assuming redress calculations remain consistent, it is expected that an additional provision in the range of £60m and £80m may also be required at the 2015 full year result. Any provision taken will be reported in cash earnings as a specified item.

“The amount of any provisions booked as part of the September 30 2015 full year results form part of the previously announced £1.7bn conduct mitigation package and will reduce the amount of the mitigation package provided in the event of demerger.

“As disclosed in the March 2015 half year results, there continue to be a wide range of uncertain factors relevant to determining the total costs associated with conduct related matters. A full assessment of the actual provisions to be recognised will be made in the normal course of the finalisation of the September 30 2015 full year results.”

David Duffy, chief executive of Clydesdale and Yorkshire Banks, said: “In the third quarter, we have had solid earnings and strong growth in mortgage lending and customer deposits. We continue to focus on delivering value and improved services to our customers by investing in new digital channels and the continued regeneration of our branch network. I am pleased with our progress in all areas and Clydesdale Bank is positioned well to deliver on our growth ambitions.”

Judges for the the Yorkshire Finance Director of the Year at Walker Morris, Leeds, Back left to right Cliff Sewell, Marc Langford, front David Leyssens and Debbie Jackson...20th September 2017 ..Picture by Simon Hulme

Yorkshire finance chiefs to take centre stage at the FD awards