NATIONAL Australia Bank Ltd, the nation's biggest, yesterday reported full-year profit declined 11 percent after avoiding credit-market losses of the magnitude that forced bailouts of lenders in the United States and Europe.
Earnings, excluding income from derivatives trading, for the 12 months ended September 30 fell to about A$3.9 billion (US$2.56 billion), from A$4.4 billion a year earlier, the company said in a statement yesterday, according to Bloomberg News.
Melbourne-based National Australia brought forward its formal financial results announcement to October 21.
National Australia has reported A$1 billion of potential losses tied to the collapse in credit markets, less than 1 percent of the amount at Wachovia Corp.
The nation's banks are among the highest rated at Standard & Poor's, reflecting their ability to weather the turmoil that prompted the US and Europe to take stakes in lenders.
"The result tells us that Australian banks are in really good shape compared with their global counterparts," said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about US$83 billion. "They're good houses in a bad neighborhood."
National Australia fell 4.3 percent to A$22.70 at the close in Sydney, versus a 4.6-percent decline in the 47-company S&P/ASX 200 Finance Index. The bank, which has dropped more than its six largest Australian rivals this year, said the profit is in line with analyst estimates.
Expectations met
National Australia's preliminary earnings announcement compares with the A$3.79 billion that Brian Johnson, an analyst at JPMorgan Chase & Co, predicted in a September 30 note. Matthew Davison, an analyst at Merrill Lynch, estimated a profit of A$3.9 billion on Tuesday.
John Stewart, who increased provisions for possible losses on collateralized debt obligations fivefold in July, will be replaced as chief executive officer by Cameron Clyne from next year.
The company brought forward its full profit announcement 10 days "in order to provide the market with additional clarity on its financial position" amid volatility in financial markets, it said yesterday. "It's usually a positive when a company brings forward its profit result," said Matthew Kidman, who helps manage the equivalent of US$350 million, including National Australia shares, at Wilson Asset Management in Sydney.