The ratings on National Australia Bank Ltd. (The National) reflect the bank's diversified core business base, favorable domestic market position, sound asset quality, and strong underlying profitability. While The National has consistently exhibited the ability to successfully manage its international network and maintain a strong domestic franchise, its acquisitive desires will be closely monitored as they could potentially affect the group's underlying credit profile. Further underpinning the rating is the bank's history of performing well through global economic cycles in a highly competitive operating environment. Offering a counterpoint to these rating benefits is a reduction in the bank's adjusted common equity ratio over recent years, and the industrywide increased difficulty in sourcing low-cost retail deposits, which Standard&Poor's views
