(Reuters) - National Australia Bank (NAB.AX) on Thursday reported a 16 percent drop in half-year cash profit as it booked a restructuring-linked cost pertaining primarily to workforce reduction costs, and said it was looking to exit its wealth management arm by 2019.
The plans, NAB said, entailed exiting advice, platform and
superannuation, and asset management businesses under MLC and other brands.
“We are targeting separation by the end of 2019 calendar year via public markets options including demerger and IPO while maintaining flexibility to consider trade sale options,” NAB said in a statement.
At an ongoing judicial inquiry into Australia’s financial sector for wrongdoings last week, NAB said it was reviewing its advice business as greater regulatory oversight changed its risk-reward calculations.
Australian banks are increasingly moving to exit non-core businesses with high compliance risks, such as wealth management.
NAB’s cash earnings were hurt by a A$755 million hit it announced last month, which is closer to the higher end of the range of A$500 million to A$800 million it had flagged in early November on expectations of future job cuts.
On Thursday it also said that around 1,050 full-time employees had already left the company by end-April against a target of 6,000 by the end of fiscal 2020.
Cash earnings, excluding one-offs and non-cash accounting items, came in at A$2.76 billion ($2.07 billion) for the six months ended March 31, compared with A$3.29 billion last year. That met a forecast of a 16 percent fall to A$2.76 billion, according to six analysts polled by Reuters.
Net interest income rose to A$6.75 billion from A$6.39 billion a year ago, while net interest margin, a key gauge of profitability, improved 5 basis points.
NAB’s common equity tier-1 ratio rose to 10.21 percent at March 31, unchanged from 10.2 percent on Dec. 31.
NAB bank maintained its interim dividend at A$0.99 per share.
Reporting by Rushil Dutta in Bengaluru; editing by Stephen Coates and James Dalgleish