Annual results: NAB mortgage book up 4%, profits down 42%

The NAB home loan book rose by $6bn (4%) from $148bn to $154bn, below system growth.

Releasing the results, NAB Group CEO Cameron Clyne described the acquisition of the Challenger mortgage management business as an important component of NAB's retail banking growth strategy

He attributed the decline in net profit to "several long standing and previously announced legal and tax proceedings, accounting volatility from market movements, and investment in the Efficiency, Quality & Service program which was not reported as an operating expense, consistent with the March 2009 half year results".

Overall Clyne described the result as "solid" in the context of "challenging conditions over the past year".

"Deteriorating asset quality and high funding costs caused cash earnings to fall by 1.9% to $3.8bn. Underlying earnings were strong and reflected both good revenue growth and careful cost management," Clyne said.

Total bad debt provisions increased from $3.3bn to $5.1bn Overall revenue grew to $16.9bn, up 9.7%.

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