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​NAB reverses loss to the tune of AU$2.55b

Off the back of its profitable half, NAB said it is continuing to invest in 'digitisation and innovation' in a bid to build out better products and services for its customers.

The National Australia Bank (NAB) has released its results for the first half of the 2017 financial year, posting AU$2.55 billion in after-tax profit -- a 246.1 percent turnaround from the AU$1.74 billion loss reported last year.

For the six months to March 31, 2017, cash earnings were AU$3.39 billion, an increase of 2.3 percent, on revenue from ordinary activities of AU$8.64 billion, down 4.7 percent year over year.

With operating expenses of AU$4.26 billion, NAB coughed up AU$341 million on computer equipment and software during the half, and spent AU$39 million on data communication and processing.

The bank's digital investments were peppered throughout its financial presentation on Thursday, with NAB noting its plans for "continuing its investments in digitisation and innovation to enhance products and services for customers".

"Technology underpins our ability to serve customers better by becoming easier and simpler to deal with," NAB Group CEO Andrew Thorburn told shareholders.

"The operating environment for banks remains challenging, including heightened regulatory change, digital disruption, and increasing stakeholder expectations. But Australia's economic fundamentals provide a favourable backdrop including strong population growth and improving business conditions."

During the six-month period, NAB launched an API Developer Portal, which provides the opportunity for approved third party developers to share data with NAB.

NAB also kicked off a three-way alliance with banks in Israel and Canada, which NAB said allows the partners to work together on the design of new digital services in addition to sharing customer and startup insights.

The bank also briefly explained that it is heavily investing in new technology that will track performance, talent, capability, and deliver leadership data and insights to NAB.

NAB relaunched its mobile banking app in December, which NAB executive general manager of digital Todd Copeland told ZDNet was more of a complete experience, rather than simply an app.

With the updated app comes new features, including the ability for customers to transfer funds using the recipient's mobile number -- a move in line with the instantaneous new payments platform project the Reserve Bank of Australia will launch later this year.

Another feature is Visa card customisation that sees users able to temporarily block cards, turn off online shopping, disable PayWave functionality, and prevent cash withdrawals from ATMs.

Customers are also able to instantly use newly approved personal Visa credit cards with a digital contract feature through NAB Pay for contactless transactions less than AU$100, negating the need for a physical card.

During the half, NAB saw mobile logins to internet banking increase by 22 percent year on year; while transactions via digital channels increased by 12 percent over the same period a year prior. New product online applications increased by 50 percent, in particular, mortgage enquiries via mobile, which experienced a 50 percent increase over the same half last year.

Since NAB introduced Android Pay to its platform in December, the bank has recorded over 49,000 transactions with the wallet, and boasts over 7,000 registered customers.

However, Apple Pay is not yet offered by the bank.

NAB is part of the group of four banks that has been seeking regulatory approval since mid-last year to collectively negotiate with third-party mobile providers such as Apple on conditions relating to competition, best practice standards, and efficiency.

The Australian Competition and Consumer Commission issued a determination denying authorisation for NAB, Westpac, the Commonwealth Bank of Australia, and Bendigo and Adelaide Bank to collectively bargain with Apple and boycott Apple Pay.

The bank's health claims and payments system (HICAPS) payment solution for health care providers received an "Uber-like" refresh in February, with the new digital platform offering real-time connection across the healthcare network.

For the initiative, NAB employed the services of healthtech startup Medipass Solutions and also partnered with Melbourne-based tech startup Localz, which won NAB Labs' inaugural Hackathon in December 2014 and received funding from NAB Ventures.

It is currently in pilot phase and is slated for rollout later this year.

NAB also mentioned that its next wave of investment in process automation is underway, which will involve automating manual and repeatable processes, expected to result in significant quality and productivity improvement cost savings of 75 percent.

The bank also added 56 Smart ATMs in 1H17, which resulted in a 90 percent increase in its Smart ATM network locations.

With the vision of being Australia and New Zealand's "most respected bank", NAB made a string of new appointments to its NAB Group Executive Leadership Team in February, including new chief technology officer Patrick Wright, who leaves his tenure as global chief Operations & Technology at Barclays in the United States, as well as former NSW Premier Mike Baird as chief customer officer.

NAB reported a 94.4 percent statutory profit slump to AU$352 million for the 2016 financial year, citing technology investments as a main contributing factor.