MELBOURNE (Standard&Poor's) May 13, 2002--The solid March half-year net profit after tax of A$2.26 billion reported by National Australia Bank Ltd. (NAB, double-'A'/Negative/'A-1'-plus) reflects the bank's historical strengths of robust revenue performance in its core domestic business, good cost containment, and prudent asset-quality management, which in turn position it well for future good performance. The result comes on the back of an extremely challenging period for the bank, following losses associated with its former mortgage business, Homeside Inc., in 2001. "Although the underlying result is sound, continued uncertainty over the future of NAB's mortgage-servicing rights asset, its macro strategy and execution, as well as the reduction in its previously better-than-peer geographic diversity following its exit from the U.S.
