Continuing momentum in the Australian and New Zealand business, improvements in asset quality and further progress in addressing legacy issues helped National Australia Bank increase its profit in June.
The bank, which owns the BNZ in New Zealand, reported quarterly earnings of $A1.75 billion ($NZ1.97 billion), about 9% higher than the previous corresponding period and 6% above the quarter average of the March result.
Group chief executive Andrew Thorburn said that during the period under review, the NAB maintained a clear focus on its core Australian and New Zealand business.
''We have continued to invest in a disciplined way in our priority customer segments of home lending, SME and specialised business to deliver a better experience for customers and improve returns to shareholders.''
Business banking loan growth had further accelerated in the bank's priority segments, which was encouraging.
Also encouraging were the recent improvements in Australian business confidence and conditions, he said.
The bank was making good progress addressing its legacy and low-returning assets to enable greater focus on building stronger Australian and New Zealand businesses.
Following the end of the third quarter, NAB had divested itself of the remaining holding in Great Western Bank, which would release about $A1.3 billion of Tier 1 capital.
Also, NAB Wealth's life reinsurance transactions took effect from July.
That was expected to release a further $A500 million of Tier 1 capital to the NAB group, reducing the exposure to retail life insurance while maintaining distribution of life insurance products and services to group customers.
In his business unit commentary, Mr Thorburn said New Zealand local currency cash earnings rose in the quarter.
Increased revenue driven by higher margins and steady volume growth was partly offset by higher expenses.
Australian cash earnings increased, reflecting further falls in bad debts charges.
Revenue rose as it felt the benefit of higher volumes of housing and business lending, partly offset by lower markets and treasury income and weaker margins in business lending.
The accounts showed the charge for bad and doubtful debts for the quarter fell 15% to $A193 million, due primarily to lower charges in Australia.
