Streamlining underpins NAB Wealth surge

28-Oct-2016

By Sarah Kendell

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National Australia Bank’s (NAB) wealth business performed strongly in the year to 30 September, benefiting from improved efficiencies as a result of a number of sales, mergers and restructures in the wealth division.

The bank’s full year results released yesterday showed NAB Wealth achieved a 13 per cent increase in earnings year on year to $356 million, with funds under management rising 12 per cent.

These outcomes were against a backdrop of 4 per cent higher cash earnings for the bank overall, while statutory net profit declined 94 per cent to $352 million as a result of the sale of both the NAB UK subsidiary Clydesdale Bank and 80 per cent of the MLC life insurance business to Japanese insurer Nippon Life.

Commenting on the results, NAB chief executive Andrew Thorburn said 2016 had been a “milestone year” of change for the bank following the major divestments, as well as a management restructure that saw the consumer banking and wealth divisions of NAB combine under former wealth group executive Andrew Hagger’s leadership.

“NAB moves into 2017 a reshaped business – stronger, simpler and focused on helping our customers in Australia and New Zealand,” Thorburn said.

“These changes have been achieved while delivering an improved operating performance and maintaining a strong balance sheet, sound asset quality and tight control of costs.”

The wealth restructure and sale of MLC Life were among a number of major changes made to improve efficiencies in NAB’s wealth offering over the year.

Others included the merger of high net worth advice group JBWere into the bank’s main wealth arm, and combining its eight superannuation funds into one new entity, the MLC Super Fund.

In its presentation to investors, NAB noted its wealth division accounted for 20 per cent of the bank’s revenue, and was ranked first in terms of its net promoter score compared to the wealth divisions of the three other major banks.

Wealth was flagged as a priority segment to drive growth in the NAB Group, with the focus now on achieving “seamless bank–wealth alignment” as well as leveraging the MLC Super Fund, which was Australia’s largest retail fund, the bank noted.

“We know customers expect simple and easy banking, and we continue to focus on improving services and reliability,” Thorburn said.

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