SYDNEY: Exiting the United Kingdon is an "absolute priority" for National Australia Bank, Chief Executive Officer Andrew Thorburn said after the bank posted a fall in annual cash profit, hit by writedowns for its troubled British business.
Thorburn said on Thursday the bank needed "urgency" in dealing with its low-returning assets, including its wealth management arm. He did not specify measures that the bank could take to unlock value.
NAB's UK business, which includes Yorkshire and Clydesdale bank branches, has been a persistent thorn in its side, with charges for bad and doubtful debt responsible for annual profit declines four times since 2008.
NAB has also been hit by charges related to misconduct in the sale of payment-protection insurance and interest rate hedging products by its UK arm.
"We have an intention to exit the UK, we think there's an opportunity now that probably wasn't there before. What we are signaling is that's our intent, it is an absolute priority," Thorburn told reporters.
Since taking the reins on Aug. 1, Thorburn has offloaded a minority stake in its US unit, Great Western Bancorp Inc, via a public offering, sold a big chunk of UK non-performing loans and shuffled key management roles.
Cash earnings for the year to Sept. 30 were A$5.18 billion ($4.55 billion), down from a restated A$5.75 billion a year earlier. This was the bank's second profit drop in three years. Revenues grew 1.9 percent to A$18.9 billion.
The decline in earnings had been flagged this month with a profit warning.
Group net interest margins dropped 9 basis points to 1.94 percent, the lowest level since September 2005. Thorburn said he expected competitive pressures to continue to squeeze margins.
Shares of NAB, valued by the market at $72 billion, have risen about 7 percent since the Oct. 9 profit warning, outperforming the benchmark S&P/ASX 200 index.
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