NAB - National Australia Bank

[Taltan]

I would put NAB drop down to:-
- CBA & WBC being more aggressive during the GFC in increasing their residntial loan books, taking away NAB's market share
- NAB's exposire to the UK
- The banks poor history in making money when going overseas, as NAB propose to further do in the UK
- The Obama proposal to tax US banks. Future regulatory risk

NAB is leader in business lending, and basically businesses have suffered much more than residential properties during the GFC. I'm a small NAB holder and am quite happy with the stock. Firtly, the current margins between business and residential are very high and going forward can only really work in NAB's favour. Secondly they may just be buying UK assets at once in a lifetime prices

My $0.02 worth

 

[McCoy Pauley]

NAB taking a beating this morning after releasing its quarterly trading update to the market before the ASX opened. Down about 2.7%, whereas the other three "big four" banks are all enjoying rises so far today.

I thought the update seemed to be positive for NAB, with unaudited cash earnings over $1 billion, with a decline in charge for bad and doubtful debts by more than $200 million in the quarter. About half the wholesale funding has been raised to date without the use of any government guarantees. The capital position has improved.

Surely the fact that NAB couldn't announce anything concrete regarding the AXA APH takeover offer isn't weighing the market down that much. I must be missing something???

Disc - I hold NAB shares.

 

[McCoy Pauley]

Positive announcement but not positive enough when compared to the other "big four" banks.

NAB always seems to surprise on the down-side recently. I'm hoping that the ACCC blocks the takeover of AXA APH to stop the NAB from spending so much money on that acquisition.

 

[oldblue]

The NAB SP took a big jump a few days ago when WBC announced its quarterly update - something like 6.5% in a couple of days. Today's retracement is a case of fact not matching anticipation. ANZ is probably in for the same treatment next week if it doesn't perform to market expectations!

 

[Fang42]

I noticed yesterday that the NAB now has 5% of SUN am i missing something here or is there a possibility that NAB may make an offer for Sun or doe it just consider it a good buy Thoughts anyone??

 

[McCoy Pauley]

I seem to recall reading that the ACCC might release its findings on the NAB-AXA takeover today but nothing has emerged (not even a peep about when the ACCC might reschedule its release).

Anyone else able to shed any light on this? I've been interstate and away from the internet for the last few days so I might have missed something.

Disc - I hold NAB.

 

[McCoy Pauley]

NAB has announced to the market after it closed that it has signed a binding agreement with AXA and AXA APH to purchase the Australian and New Zealand businesses of AXA APH for $4.6 billion as part of a proposal to acquire all shares in AXA APH. AXA will purchase the Asian businesses for $9.4 billion, including $700 million to pay off AXA APH debt.

ASX announcement here.

Still subject to ACCC approval.

 

[McCoy Pauley]

AXA APH has issued a release to the market which summarises the key features of the deal.

http://www.asx.com.au/asxpdf/20100330/pdf/31pjylzbh6cgt2.pdf

 

[robusta]

AMP were offering to much for AXA, NAB will pay way over the odds if the ACCC lets them go ahead

 

[oldblue]

AMP were offering to much for AXA, NAB will pay way over the odds if the ACCC lets them go ahead

I'm not sure how outsiders would value AXA from the point of view of AMP and NAB.

Both regard it as the last big chance to beef up their wealth management businesses and are prepared to pay a premium for that. So there is an element of strategy involved in the price. The difference between the two is that AMP couldn't afford to pay the premium without making an unpopular dilutive capital issue. NAB doesn't have that problem.

 

[sptrawler]

I can understand AMP making a play for AXA to increase critical mass. However why NAB would make a play until the findings of the review into superannuation commissions and fees is finalised is beyond me.

 

[robusta]

I'm not sure how outsiders would value AXA from the point of view of AMP and NAB.

Both regard it as the last big chance to beef up their wealth management businesses and are prepared to pay a premium for that. So there is an element of strategy involved in the price. The difference between the two is that AMP couldn't afford to pay the premium without making an unpopular dilutive capital issue. NAB doesn't have that problem.

I take your point that is how NAB will justify the aquisition but I think the price they are paying will take ages to pay back and it will dilute the returns for NAB shareholders for years to come. But hey I bet some executives get some nice bonuses. I am just glad I hold CBA instead.

 

[JTLP]

So what's with the NAB anyway? Is this recent AXA bid keeping them down?

They seem to be the bank out of the big 4 that lags the most...what gives? Don't know if you can see on the chart (yearly) but they are the bold, CBA is the thin black, ANZ is the red and WBC is the green.

Do they have the most nasties in the closet? Mmm

 

[oldblue]

So what's with the NAB anyway? Is this recent AXA bid keeping them down?

They seem to be the bank out of the big 4 that lags the most...what gives? Don't know if you can see on the chart (yearly) but they are the bold, CBA is the thin black, ANZ is the red and WBC is the green.

Do they have the most nasties in the closet? Mmm

There's also the uncertainty around NAB's British business. They are shortlisted with others to buy RBS branch network. Not everyone agrees that would be a good move!

 

[vincent191]

I take your point that is how NAB will justify the aquisition but I think the price they are paying will take ages to pay back and it will dilute the returns for NAB shareholders for years to come. But hey I bet some executives get some nice bonuses. I am just glad I hold CBA instead.

Whew....the ACCC had saved NAB from themselves, now to see the sp catch up what it had losted since the t/o bid was announced. Honestly, I believe some of the NAB executives wouldn't find their own bottoms with both hands with the lights switched on.

NAB's performance is the worst of the big four and had not taken advantage of the GFC and picked up any bargains. Well, the pigeon had flown, forget it, just use the cash wisely like giving it back to the shareholders instead of trying to find ways to blow it.

I tried to be safe and have invested in all four, in my financial portfolio NAB holds the wooden spoon.

 

[oldblue]

In a race with four starters there's always going to be a wooden spooner. But havn't the other three run well lately!

However, we may not have seen the last of NAB's bid with talk today of "reconfiguring" a new one.

 

[vincent191]

In a race with four starters there's always going to be a wooden spooner. But havn't the other three run well lately!

However, we may not have seen the last of NAB's bid with talk today of "reconfiguring" a new one.

That is my biggest fear, NAB still want to ignore market and shareholders sentiments and press on with the t/o. Well go on ahead then NAB management and if it turns out to be a dud hopefully you guys have the decency to fall on your swords.

 

[drsmith]

A comparison of NAB's and WBC's share prices from late 1992 (when WBC was on it's knees) and today does not reflect well on NAB's management.

 

[The Owls]

Quote from SMH today
"National Australia Bank's traditional strength in business banking has failed to offset a drop in the group's half-year statutory profits which have slid by a fifth to $2.1 billion due to the group's exposure to volatile financial trading factors.

While NAB's cash earnings – the banking industry's preferred measure of profit which excludes such volatility – rose by 21 per cent to $2.2 billion – the figure directly attributable to shareholders dropped by the same percentage because of the need to account for the trading swings. The cash result was in line with analysts' forecasts"

http://www.smh.com.au/business/nab-stingy-with-dividend-as-profit-drops-20100506-ub86.html

Could someone please explain in very simple terms what this means.

 

[drsmith]

Quote from SMH today
".......due to the group's exposure to volatile financial trading factors.

Could someone please explain in very simple terms what this means.

Generally something that cannot be explained simply or favourably or both.

You'll most likely have to dig into the accounts to find an explanation.