By Rhiannon Hoyle
SYDNEY--National Australia Bank Ltd.'s (NAB.AU) restructuring of
its U.K. operations is on track and the unit is now profitable,
however it continues to face challenges in a difficult U.K. market,
its chief executive said.
Consumer and business confidence in Australia also remains
"fragile," and both companies and individuals here will likely
remain reluctant to commit to major investments until sentiment
regarding the economic outlook improves, Cameron Clyne said Sunday
in an interview with Australian Broadcasting Corp.'s Inside
Business program.
Mr. Clyne launched a review of NAB's business after its
struggling U.K. banks dragged profit down by 1 billion Australian
dollars (US$1.04 billion) last fiscal year. The slump in earnings
came at a time when Australia's other major banks were reporting
record results, triggering a backlash from investors.
"There's no question the business has got challenges and it's
operating in a difficult market," he said referring to the U.K.
unit in a transcript of the interview. But he added: "The
restructuring is on track. It's a profitable business now,
[although] obviously it will be subject to the economy and what's
going on over there."
Australia's fourth-largest lender by market value said last week
it would look to cut A$800 million from its annual costs by 2018
through merging technology, centralizing administrative roles and
reducing the size of branch offices.
Australian "consumer and business confidence remains fragile,"
Mr. Clyne said. Australian business conditions weakened slightly in
February, as the high Australian dollar continued to take a toll on
manufacturers, a recent survey by NAB showed.
"People are still reluctant to commit to major investment be it
business credit or housing finance and that's going to continue
until we get a more confident outlook," Mr. Clyne said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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