NAB has flagged the loss of 6,000 jobs as the impact of new technology and digital transactions cuts a swathe through traditional banking jobs.

Key points: 6000 traditional bank jobs to go and 2000 new digital positions created as NAB aims to move 60 per cent of its business online over three years

6000 traditional bank jobs to go and 2000 new digital positions created as NAB aims to move 60 per cent of its business online over three years Redundancies are expected to cost up to $800 million

Redundancies are expected to cost up to $800 million Despite record underlying cash profit of $6.6bn, shares fall on cost blow out

The job losses over three years were announced as the bank revealed a full year net profit of $5.3 billion.

In announcing the cuts NAB chief executive Andrew Thorburn said the entire banking industry was under pressure to reshape its workforce.

"As transactions move to digital channels — and this is driven by our customers — we will need fewer people," Mr Thorburn told a media briefing.

"What we are not saying is that 6,000 are going here and here and here, it will be done over three years."

Mr Thorburn said the net job loss would be closer to 4,000 as 2,000 new digitally focused positions will be created.

More existing bank closures were foreshadowed as well, although Mr Thorburn said new branches would be added in the growth corridors in western Sydney and Melbourne.

The bank is expected to announce restructuring costs relating to the redundancies of between $500 million and $800 million in first half results early next year.

The cost-cutting measures are budgeted to deliver annual savings od $1 billion by 2020.

NAB also said it planned to increase its investment in "simplifying" the bank by $1.5 billion over the next three years, on top of an existing $3 billion internal investment program.

The bank plans to halve the number of products it sells and drive 60 per cent of its business through digital channels.

Velocity Trade bank analyst Brett Le Mesurier said if history was any guide, NAB would struggle to deliver on the big changes it has promised.

"I'm trying to remember the last time NAB put in place a large efficiency drive that worked — history says the answer is never," Mr Le Mesurier said.

"The new management may be able to deliver may be able to deliver what previous managements couldn't, but history is not on their side."

Record cash profit but shares fall

The $5.3 billion net profit was up more than 1,400 per cent on the wafer-thin effort of 2016.

The rebound was largely expected as last year's $352 million profit was dragged down by the loss-making sales of the bank's UK and life insurance businesses.

Cash profit — the bank's preferred measure that strips out one off gains and losses — was up a more modest 2.5 per cent to a record $6.6 billion.

This was in line in with market expectations, as was the full-year dividend of $1.98 per share.

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The profit was affected by a 1.3 per cent increase in bad and doubtful dents to $180 million, although the bank said overall credit quality improved as percentage of the total loans.

NAB beat expectations with a better than expected net interest margin (NIM) — or the difference between the bank's borrowing costs and the rate it lends.

Net interest income grew by $238 million, or 1.8 per cent, boosted by increased lending volumes and the higher mortgage rates reaped from investor mortgages.

Offsetting this to an extent was the $94 million cost of the new bank levy imposed by the Federal Government after the May budget.

UBS's Jonathan Mott described the result as solid with the NIM stronger than expected, but he said the market will focus on the flagged cost blow-out.

Mr Mott said costs are up 5 to 8 per cent above previous guidance, and that is not including the foreshadowed $800 million restructuring and redundancy costs.

The market did not like what it saw and on opening (10:20am AEDT) NAB shares tumbled 2.6 per cent to $32.00.