NAB - National Australia Bank

[ROE]

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.

What they saying is NAB is involve in derivatives and risky financial instruments that has a drop in earning but they don't earn enough in business lending to offset the big drop

I don't have NAB shares so I don't know for sure but that my interpretation of it ....

check their books and financial statement to be sure..

 

[robertgordon]

NAB : 23rd August /+1 should turn out to be a very significant turning point for NAB . The most likely prospect is a Seasonal Low into the 23rd if the current trend continues down . The 23rd August is Square or 90 degrees Anglo from the 21st May Low and 150 degrees in Longitude from March 21st which is 0 degrees on the Square , many important changes in trend culminate around these dates .

 

[trainspotter]

Have recently changed their website to make it more user friendly. LOL ... all they have done is made the FONT bigger and the icons LARGER to click on. WOW !!

A big concern for me is the amount of bad debt they are carrying (1.064 billion as at June 30th 2010) and their need to raise at least $2 billion via a fully underwritten institutional share placement to cover this debt. Possible 10% discount on current share value? Looking at raising 2.75 billion in total. There will also be a retail offering to raise a further $750 million.

Hmmmmmmmmmm ... and I bank with this mighty finance institution.

 

[kash]

Thanks for those points. Actually looking at moment which would be the best bank to invest in for growth. NAB might be out??

 

[oldblue]

Have recently changed their website to make it more user friendly. LOL ... all they have done is made the FONT bigger and the icons LARGER to click on. WOW !!

A big concern for me is the amount of bad debt they are carrying (1.064 billion as at June 30th 2010) and their need to raise at least $2 billion via a fully underwritten institutional share placement to cover this debt. Possible 10% discount on current share value? Looking at raising 2.75 billion in total. There will also be a retail offering to raise a further $750 million.

Hmmmmmmmmmm ... and I bank with this mighty finance institution.

All banks make some bad loans, it's an unavoidable part of the business. It's important however to put these numbers in context.

NAB has total assets of around $650 billion including loans of $427b.

Equity at 31 March 2010 was $38b, earnings for the half year were over $2b.

Banks need to increase their capital regularly to enable them to maintain capital ratios to increase lending. I havn't seen a recent announcement though. What is the refernce for this?

 

[robusta]

May be worth another look at NAB now the ACCC have stopped them paying a massive premium to buy AXA. It should ring alarm bells to directors when the regulator knocks them back and the sp jumps 4%

 

[trainspotter]

All banks make some bad loans, it's an unavoidable part of the business. It's important however to put these numbers in context.

NAB has total assets of around $650 billion including loans of $427b.

Equity at 31 March 2010 was $38b, earnings for the half year were over $2b.

Banks need to increase their capital regularly to enable them to maintain capital ratios to increase lending. I havn't seen a recent announcement though. What is the refernce for this?

My complete apologies oldblue. I was quoting old figures. They are down to a "writeoff" of 514 million of bad debt with no script needed for funds. I do apologise for posting such bad erudition. I was having a bad hair day with my "upline" manager of NAB and wanted to be snarky.

 

[McCoy Pauley]

Finally senior management listen to the market and abandon the AXA takeover once and for all.

http://www.theage.com.au/business/nab-pulls-out-of-axa-bid-20100914-15as4.html

 

[awg]

I would be annoyed if I was a NAB holder, or customer

How ludicrous is this debacle with peoples money?

Very bad for sentiment

Sometime early this week I reckon the IT Manager will be
needing to examine the "show cause" clause in their employment contract.

 

[Greedy_Kev]

I would be annoyed if I was a NAB holder, or customer

How ludicrous is this debacle with peoples money?

Very bad for sentiment

Sometime early this week I reckon the IT Manager will be
needing to examine the "show cause" clause in their employment contract.

I'm a nab share holder and customer, and believe the media is over stating the crisis, it's bad but only for those who are living on the edge and so shouldn't be that bad for SP over a longer period.

 

[prawn_86]

Full year profits down 22% compared to last year on the back of restructuring their UK division and "ineffective hedging"

 

[Bill M]

It's hardly effected the share price, only down .03c at the moment. Dividend is maintained at .90c which is close to 7% fully franked for the year. I'll be hanging on to these a while longer.

 

[Knobby22]

Well I thought the results are pretty unimpressive.
Losing money in England + relying heavily on business loans that aren't happening at present due to lack of confidence.

If the world economy turns NAB is in a great place but under present conditions it deserves a lower rating than the other banks, especially CBA and ANZ.

 

[Julia]

Well I thought the results are pretty unimpressive.
Losing money in England + relying heavily on business loans that aren't happening at present due to lack of confidence.

If the world economy turns NAB is in a great place but under present conditions it deserves a lower rating than the other banks, especially CBA and ANZ.

Agree. Was Cameron Clyne CEO at the time of the forex scandal and the Homeside Lending debacle?

 

[Klogg]

Agree. Was Cameron Clyne CEO at the time of the forex scandal and the Homeside Lending debacle?

I believe the forex one was John Stewart, and the Homeside lending Ahmed Fahour.

Having worked under all three of these CEOs, Clyne is by far the best IMO.

 

[Bill M]

NAB has had it's problems over the last decade or so, everybody knows about it. It however has always still made profits and paid dividends. I've had NAB over 10 years off and on and this is what I think:

In 10 years the share price has grown an unimpressive 3% or so. During that whole time the dividends kept on rolling in. I have sold at higher prices and then bought back at lower prices so I have been gambling as well.

If I had just held the first parcel from 10 years ago then I would have annualised a 10% gross income (including growth, dividends and franking) in that period of time. For a so called dud that is still a good return for a self funded retiree! In fact I did better because I bought and sold.

I still hold a small batch at a profit, if it goes much lower I will be buying another batch before ex dividend date. There are current problems and write downs but I think NAB is a long off from being a basket case. They are doing very well with UBank and Australia in general.

I also have shareholder benefits, like for example a free Qantas Platinum Card with free travel insurance each year.

I am hoping and waiting for lower prices and with a big fat juicy dividend on the way I have no intention of selling my current stock.

 

[skc]

If I had just held the first parcel from 10 years ago then I would have annualised a 10% gross income (including growth, dividends and franking) in that period of time. For a so called dud that is still a good return for a self funded retiree! In fact I did better because I bought and sold.

You have to compared that with the other Big 3 though...

 

[Bill M]

You have to compared that with the other Big 3 though...

Correct, I hold those too and they did even better. CBA is by far the stand out for me.

 

[burglar]

Correct, I hold those too and they did even better. CBA is by far the stand out for me.

After 32 years of unhurried deliberation,
I have decided to dip once more, into Blue Chips.
NAB is my choice because:

a). I believe they are undervalued.
b). The shareprice appears volatile (to me).
c). Good yield.

Like you Bill M, I will endeavour to trade them!
Else, I might go medium term for the growth.
Otherwise, I just might hold them forever for the dividend.

 

[Garpal Gumnut]

After 32 years of unhurried deliberation,
I have decided to dip once more, into Blue Chips.
NAB is my choice because:

a). I believe they are undervalued.
b). The shareprice appears volatile (to me).
c). Good yield.

Like you Bill M, I will endeavour to trade them!
Else, I might go medium term for the growth.
Otherwise, I just might hold them forever for the dividend.

A very good punt, burglar, but beware, at this point and beyond.

I read in the AFR that some mob of brokers had upgraded NAB to a buy from outperform, " reluctantly " they said. I do love the English language, truths and lies hidden in nuances.

This often imo precedes a fall in price, as brokers generally distribute parlous stock from their strong holders to the weak, i.e. institutions to mums and dads.

I won't post a chart. It has been in an uptrend since you bought, but in a long term trading range, about to touch the top.

I would buy if it went beyond $27-$28, or retreated to $17.

gg