Yesterday NAB’s wealth management business reported a 28.2% increase in cash earnings to $223 million for the six months to 31 March 2015.
NAB Group chief executive Andrew Thorburn said measures the bank had taken to improve NAB Wealth’s performance were working.
“In October 2014 we highlighted that while we remain committed to distributing wealth products, recent regulatory changes had prompted us to evaluate options to improve overall returns for our Wealth business,” Mr Thorburn said.
The strong performance was attributed to improved results in the investments and insurance businesses as well as lower operating expenses.
The company also reported that net income rose 8.0% due to improved insurance claims performance, stable lapses and growth in funds under management as a result of strengthening investment markets.
At the same time, NAB Wealth received APRA approval for its life insurance arm to enter into a reinsurance arrangement with a major global reinsurer for about 21 per cent of its in-force retail advised insurance book.
“The transaction is expected to release approximately $500 million of CET1 capital (13 basis points) to the NAB Group,” NAB said.
“This is expected to result in a reduction in NAB Wealth cash earnings of approximately $25 million per annum.”
In other results, NAB reported its cash earnings were up 5.4 % to $3.32 billion, an increase of $170 million for the year.
There was an interim dividend of 99 cents per share fully franked.
