NAB has become the latest bank to retreat from the wealth management business, announcing it will sell MLC.

Key points: NAB to divest its MLC wealth management by the end of 2019 by either a demerger or trade sale

NAB to divest its MLC wealth management by the end of 2019 by either a demerger or trade sale Sale not related to revelations at royal commission, according to NAB

Sale not related to revelations at royal commission, according to NAB Statutory half-year earning flat at $2.6b, underlying cash earnings down 16 per cent on big restructuring costs

The decision follows ANZ's exit from most of its wealth advisory and insurance businesses and the CBA undertaking a study to float its Colonial First State Asset Management arm.

Over the years, the big retail banks have struggled to integrate wealth businesses into their core operations and the "holy grail" of successful cross-selling products has never really been found.

The scandals bubbling up from wealth management and financial advice divisions at the banking royal commission has only hastened the bank's decision to retreat.

The decision was announced as NAB unveiled a half-year net profit of $2,583 million, a marginal 1.5 per cent lift on last year.

Underlying cash earnings — the bank's preferred measure of profit — were $2.77 billion for the half, down 16 per cent on last year and marginally down on expectations.

Complexity is killing us: NAB

NAB chief executive Andrew Thorburn said the need to simplify the bank, rather than events at the royal commission, were behind the sale.

"We need to simplify the bank. The complexity in the bank is just killing us," Mr Thorburn said.

However, it is not a complete retreat back to core banking with NAB holding to its broking and wealth management business JB Were and online broking operation NAB Trade.

Andrew Thorburn says the divestment of MLC is not related to the banking royal commission. ( AAP: Dan Himbrechts )

"But, when we look at MLC, we feel it's a good business and I think with some independent ownership and greater investment, it can really be a very sustainable and growing business in the whole superannuation field," Mr Thorburn told a media briefing.

"It really has had nothing to do with what has come out in the royal commission … it's been a very considered and deep piece of work.

"We would not make a decision that's this major based on a couple of weeks of evidence at the royal commission — respecting the royal commission's importance.

"This is a major decision of the bank, and we would not make it on the space of some noise and some shameful things that have happened," Mr Thorburn said.

MLC is one of Australia's oldest wealth managers, tracing its origins back to the Citizens' Assurance Company in the 1880s.

NAB bought the insurance, superannuation and financial adviser from Lend Lease in 2000 for $4.6 billion, which was then one of the biggest takeovers in Australian corporate history.

NAB had already started edging out of the business two years ago selling MLC's life insurance business to Japan's Nippon Life.

Despite high hopes of big returns, MLC has never really delivered for NAB only accounting for around 4 per cent of the bank's total earnings.

A decision has yet to be made about how to divest the business with either a demerger and float or trade sale being considered.

The process is expected to be completed by the end of 2019.

Shares fall on result

Mr Thorburn said the result was solid, with cash earnings relatively stable once restructuring costs were excluded.

Revenues grew by 2.5 per cent with growth in home and business lending supported by higher margins from more expensive investor loans.

Costs rose 25 per cent largely due to restructuring costs associated with redundancies and starting to roll out a new IT program.

The program is expected to coast $1.5 billion over three years.

So far 1,050 employees have left the NAB against a targeted loss of 6,000 jobs by 2020.

The loan repricing helped edge up margins, although the gain was partially offset by the bank tax imposed in last year's federal budget and greater competition in the market place.

Another decrease in bad loans also helped support the result with impairment charges falling by 5.3 per cent to 4373 million.

Asset quality reflected in loans repayments more than 90 days past their due date and gross impaired assets were also down from a year ago as conditions improved in both Australian business and the New Zealand dairy industry.

The first half dividend was kept flat at 99 cents per share.

Mr Thorburn said the business had strong fundamentals and a strong balance sheet.

"We continue to learn from our mistakes and respond to changes to be better for our customers.

"The commitment of our people to doing the right thing is unwavering and together we are working to restore trust and respect in our industry, during and after the royal commission," Mr Thorburn said.

Investors were not overly impressed with NAB shares falling 1.6 per cent to $29.10 in early trade.