The A$2.26 billion half-year net profit after tax posted by National Australia Bank Ltd. (NAB, AA/Negative/A-1+) is a solid result in what has been an extremely challenging period for the bank, following losses associated with its former mortgage business, Homeside Inc., in 2001. The result positively 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. Although the underlying result is sound, continued uncertainty over the future of the bank's mortgage-servicing rights asset and 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. market, continue to
