May 8, 2013 / 10:26 PM / 5 years ago

National Australia Bank posts 3.1 percent rise in H1 profit

SYDNEY, May 9 (Reuters) - National Australia Bank, the country’s largest bank by assets, reported a 3.1 percent rise in first-half profit on Thursday, as higher earnings in its Australian personal and wholesale banking units were constrained by losses in its UK business.

NAB, which announced restructuring plans to cut costs in March, posted a cash profit of A$2.92 billion in the six months to March 2013, compared with A$2.83 billion a year ago.

The result was just ahead of average analyst estimates of A$2.87 billion profit according to Thomson Reuters I/B/E/S data.

The bank said it expected demand for credit in Australia, its major market, to remain “relatively soft” in the coming year, despite historically low interest rates.

The bank said it would pay a A$0.93 dividend, compared with A$0.90 a year ago.

NAB’s profits have lagged its “Big Four” peers -- Australia and New Zealand Banking Group Ltd, Commonwealth Bank of Australia and Westpac Banking Corp -- as it remains hamstrung by its poorly performing UK operations.

Net interest margin, a measure of profitability, dropped three basis points from the September quarter to 2.03 percent, while Tier I capital, a measure of a bank’s ability to absorb unforseen losses, increased 32 basis points over the same period to 8.22 percent.

The bank’s first-half charge for bad and doubtful debts was broadly in line with a year ago.

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