Bulletin: NAB's Capital Strengths Absorb Profit Downturn

SYDNEY (S&P Global Ratings) Nov. 7, 2019--National Australia Bank Ltd.'s (NAB, AA-/Stable/A-1+) creditworthiness remains strong by global comparison, in S&P Global Ratings' view, despite testing operating conditions. The bank today announced a statutory net profit decrease of 13.6% for fiscal 2019 (ended Sept. 30, 2019). The results, including one-off adjustments, are broadly in line with our expectations. In our view, NAB's reduced earnings--due to low interest rates, subdued credit growth, high customer remediation costs (accounting for more than 20% of pretax profits in fiscal 2019), and changes to the application of its software capitalization policy--marginally erode the buffer in the bank's financial profile for any further adverse developments. Specifically, we expect that the bank will be able to maintain its

...November 6, 2019 SYDNEY (S&P Global Ratings) Nov. 7, 2019--National Australia Bank Ltd.'s (NAB, ##-/Stable/A-1+) creditworthiness remains strong by global comparison, in S&P Global Ratings' view, despite testing operating conditions. The bank today announced a statutory net profit decrease of 13.6% for fiscal 2019 (ended Sept. 30, 2019). The results, including one-off adjustments, are broadly in line with our expectations. In our view, NAB's reduced earnings--due to low interest rates, subdued credit growth, high customer remediation costs (accounting for more than 20% of pretax profits in fiscal 2019), and changes to the application of its software capitalization policy--marginally erode the buffer in the bank's financial profile for any further adverse developments. Specifically, we expect that the bank will be able to maintain its overall relative capital strength by offsetting the cut in its earnings through a dividend reinvestment plan and lower dividend per share than in previous...

Bulletin