National Australia Bank H1 net profit rises 8 pct to A$2.2 billion

Australia's largest bank, National Australia Bank Ltd. (NAB), said on Friday its first half to March 31 cash net profit rose 8 percent to A$2.2 billion ($2.07 billion), driven by solid lending growth in Australia.

The result was in line with a market consensus forecast and followed revenue increasing by 7.1 percent to A$7.6 billion.

Lending growth rose 15.4 percent to A$410.8 billion and retail deposits grew by 10.3 percent A$166.2 billion.

Cash earnings per share on a diluted basis rose 8.7 percent to A$1.372 a share.

Cash net profit excludes one-off items and non-cash accounting treatments.

Headline net profit including one-off items surged 25.8 percent to A$2.7 billion.

NAB declared a A$0.97 a share interim dividend, up from the previous first half's A$0.87 and higher than a consensus forecast dividend of A$0.95.

The bank said the charge for bad and doubtful debts increased by A$336 million to A$726 million, mainly as a result of a small number of corporate exposures including an A$80 million charge relating to loans provided to embattled Allco Finance Group Ltd.

NAB chief executive John Stewart said strong earnings in each business unit had continued into the first half of the 2008 financial year.

"With the right settings it is still possible to grow successfully in challenging conditions," Stewart said.

He said credit growth is already slowing in both the UK and New Zealand, but remains stronger in Australia in line with economic activity.

NAB owns the Yorkshire and Clydesdale banks in the UK.

($1 = A$1.06)

bruce.hextall@thomsonreuters.com

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