NATIONAL Australia Bank’s third-quarter profit has dropped about three per cent because of a jump in bad and doubtful debts in regions associated with mining and agriculture.
The lender on Monday said cash profit for the three months to June 30 was $1.6 billion, with bad and doubtful debt charges rising 21 per cent to $228 million.
The rise in bad debts mirrors those at NAB’s major rivals, with Westpac, ANZ and Commonwealth Bank all announcing a rise in bad or doubtful debts last week.
NAB chief executive Andrew Thorburn insisted the bank remained well placed. “The Australian and New Zealand economies remain resilient and continue to deliver growth amid heightened global uncertainty,” Mr Thorburn said.
“While we saw higher funding costs during the quarter, asset quality remains strong and cost control was pleasing.”
Expenses fell about one per cent, but Mr Thorburn said the rise in funding costs was to blame for the bank’s decision not to pass on the Reserve Bank’s most recent rate cut in full to its home loan customers.
“The decision reflects the responsibility we have to balance the needs of all stakeholders — borrowers, depositors and our 584,000 shareholders,” Mr Thorburn said.
NAB’S THIRD QUARTER
* Cash profit down 3pct to $1.6b
* Bad and doubtful debts up 21pct to $228m