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NAB full year cash earnings of $5.7 billion, down 14.2%.

Net interest margin flat at 1.85%.

Restructuring cost of $755 million and customer remediation of $360 million.

The NAB’s full year cash earnings fell 14.2% to $5.7 billion, dragged down by more than $1 billion in combined restructuring costs and paying back customers impacted by scandals being investigated by the financial services royal commission.

But the bank managed to hold on to its margins, with the net interest margin flat at 1.85%, and to grow its lending book, lifting both housing and business loans.

Andrew Thorburn, the CEO of the NAB, says the business environment is challenging and will continue like that for at least the next year.

“We are making progress to be a better bank for our customers, employees and owners,” says Thorburn.

“While 2018 has been a challenging year, our transformation is on track and benefits are emerging as we become simpler and faster.”

The results included restructuring costs of $755 million and customer remediation payouts of $360 million.

Excluding these, cash earnings fell 2%.

Statutory profit was $5.55 billion, up 5%.

Staff numbers fell by 1897 as part of the plan to take out 6000 by 2020. Current staff numbers are 33,283.

The bank announced a final dividend of 99 cents a share, bringing the full year payout to 198 cents, flat on the previous year.

Thorburn says the bank had good lending growth and stable margins.

Net operating income grew 1.8% to $9.13 billion, before adding in the cost of customer remediation.

Total loans grew 3.5%, or $20.4 billion, to $585.59 billion. Housing lending was up 3% to $339.54 billion.

Expenses rose 6.4% to $8.126 billion, not including restructuring and remediation.

Thorburn says costs will be flat for the next two years.

“We are listening and responding to customers, including royal commission issues, and are proactively taking steps to be more customer focused, trusted by customers for exceptional service,” he says.

The 2018 numbers:

NAB

The bank expects cumulative cost savings from restructuring of at least $1 billion by September 2020.

“Since announcing the reshaping of our wealth business, we have made good progress towards separating MLC ahead of a targeted public market listing by the end of 2019 calendar year,” Thorburn says.

“We are operating in a challenging environment and remain alert to risks.

“The Royal Commission has raised instances where we failed to treat customers with care and respect.

“We are determined to put things right and are taking steps to build a better bank.”

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