NAB has announced a cash profit of AU$5.94 billion, up 9 percent on the September 2012 AU$5.4 billion figure. The cash profit, a measure that banks use to reflect underlying performance, rose in the year to September 30 as the bank contained costs and reduced bad debts relating to its troubled UK business.
The bank's net profit, which includes one-off financial items, was AU$5.45 billion, up 33.6 percent from AU$4.08 billion in the previous year.
During the year, the company invested AU$200 million in software related to its new NextGen core banking platform, and launched the first products to be based on NextGen: The fully automated online application, UBank Usaver Ultra; and NABTrade, an online trading platform targeted at self-managed super funds.
The company has undergone a number of consolidation projects, taking four international payment gateways into a single gateway, merging 3,000 employees into a centralised banking operations and technology team, and starting the migration of the Wholesale Banking division's technology support infrastructure to the same platform that the Australian operation uses.
Last month, NAB also launched Flik, a peer-to-peer payments app available on iOS and Android.
"Over the year, we've continued to simplify and digitise our Australian franchise. Since 2010, we've rationalised approximately 50 percent of our core banking products, and automated and simplified a number of processes so that bankers can spend more time with customers," said NAB chief executive Cameron Clyne.
"Our enterprise-wide technology and infrastructure transformation is making good progress on a number of fronts. The upgrade of our core banking platform is tracking well with the launch of the first transaction product on the NextGen platform — UBank USaver Ultra — which offers a fully automated online application process."
The NextGen project commenced in 2009, with Oracle selected to provide the backbone of the system. In its full-year filings to the ASX, NAB said that NextGen has improved capabilities throughout the company and enhanced its online offerings.
The year to September 2013 was a tumultuous one for the company's CIO position. In November 2012, the company cleaved the role into two parts, with the CIO Adam Bennett being named as executive general manager of enterprise transformation and given responsibility for NextGen and the overall IT strategy for the bank, and Denis McGee, formerly the application development and testing general manager, taking on the everyday management of IT for NAB in the CTO role. But by April, McGee was appointed to the CIO position for what the bank said were "internal reasons".
Looking at the overall results of the company, NAB chief executive Cameron Clyne said the result reflected an improved performance across most areas of the business.
"The group's full-year results show an improved performance across most business units, combined with solid progress against our simplification and digitisation agenda," he said.
The bank increased its net revenue by 2 percent to AU$18.58 billion, while its group net interest margin fell nine basis points to 2.02 percent. The total charge for bad and doubtful debts was AU$1.93 billion, down AU$681 million compared to the previous year thanks to improved asset quality trends, particularly in NAB's UK business and its business banking division.
"Some improvement in the UK operating environment and initiatives to reduce the Australian risk profile have supported a lower charge for bad and doubtful debts," Clyne said.
Operating expenses were contained at 1.9 percent, excluding the one-off costs relating to the restructure of the bank's Australian business.
"Over the year, we've continued to simplify and digitise our Australian franchise," the NAB CEO said.
"Since 2010, we've rationalised approximately 50 percent of our core banking products, and automated and simplified a number of processes so that bankers can spend more time with customers," he said.
NAB announced a fully franked final dividend of 97 cents, an increase of 7 cents compared to a year ago.