Site menu

Search by ticker code:
Generic filters


Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

NAB (ASX:NAB) shares rise despite more FY20 costs

The National Australia Bank Ltd (ASX:NAB) share price is up despite the major ASX bank reporting more costs for the upcoming FY20 result.

The National Australia Bank Ltd (ASX: NAB) share price is up despite the major ASX bank reporting more costs for the upcoming FY20 result.

NAB’s painful update

The major bank said that its FY20 second half earnings will be impacted by a number of items.

There will be a net increase in provisions for customer-related remediation relating to the Hayne Royal Commission. The total cost is $380 million before tax, or $266 million after tax.

The $380 million is broken up into two areas. There is $245 million of before tax costs for wealth-related matters – this is now included in the discontinued operations section of its reporting. This is for matters relating to non-compliant advice provided to wealth customers and for adviser service fees charged by NAB Financial Planning, with an assumed refund rate of 66% after interest costs. It also includes “other matters” for a general increase.

There is also $135 million of before taxes which is for banking-related matters, which will be included in cash earnings.

In addition to the $380 million, there is also a net increase in the payroll remediation provisions of $128 million before tax. This relates to an issue relating to under (and over) paying dating back to October 2012.

On top of that, NAB said there’s an impairment of property-related assets of $134 million before tax. This relates to plans to consolidate NAB’s Melbourne office space with more staff likely to work from home more often. The office will be used for purposes of collaboration, planning and creating the right culture.

The above provisions and impairment are calculated to reduce NAB’s CET1 capital ratio by approximately 15 basis points (0.15%).


NAB keeps recognising painful costs for its accounts. The Royal Commission costs have been going on for a few years now. It’s a serious drag on profit, at a really bad time. If only NAB had done the right thing from the start.

Another issue that NAB is facing is that its net interest margin (NIM) is hurting – which is a key profit driver. As long as official rates are low, it makes it harder for NAB to generate decent profit.

NAB may be in a better place once COVID-19 impacts are over and all the remediation is paid. But the key could be higher RBA rates. Until then, there are other ASX dividend shares I’d buy such as Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Brickworks Limited (ASX: BKW).

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz owns shares of WHSP.
Skip to content