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NAB boosts operating profit by 20%

By Phil Boeyen, ShareChat Business News Editor

Thursday 2nd November 2000

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National Australia Bank has announced its eighth successive year of record earnings, posting a group operating profit of A$3.377 billion after tax but before abnormals, up 20% on last year.

The latest result includes a contribution of A$107 million for one quarter of financial services company MLC that was acquired in June for A$4.6 billion.

NAB says 47% of its operating profit was generated outside Australia, although Australia produced a very strong result with operating profit up 27%, driven by strong growth in lending, maintenance of underlying margins, cost control and asset quality.

Managing director, Frank Cicutto, says the group has performed well.

"To achieve both a record profit and maintain the pace of our transformation reflects the great commitment and capability of people throughout the Group. We have successfully completed a major acquisition, continued to streamline our global operating model and increased the value we are deriving from our core businesses."

Mr Cicutto says a priority in the year ahead for the bank will be to fully leverage the strengths and potential of its Northern Hemisphere assets and another priority in Australia will be to consult with community groups and others on matters relating to service access and cost.

The bank says its Clydesdale and Yorkshire Banks, Michigan and Bank of New Zealand all performed creditably during the 2000 financial year.

The Bank of New Zealand's after-tax profit rose around 9% on last year to A$389 million, which the BNZ says was a pleasing result given the slowing economy, pressure on interest rate margins and lower levels of consumer and business confidence.

Its GlobalPlus brand has been successful in both credit cards and home loans, with the GlobalPlus Home Loan now accounting for 20% of the banks' mortgages. Under the brand homeowners can earn Air New Zealand Air Points for every dollar of their home loan.

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