Australia's NAB reports $4.2bn full-year profit

SYDNEY, Australia (AP) — National Australia Bank, one of the country's largest lenders, reported Wednesday a 63 percent surge in full-year net profit to Australian dollars 4.2 billion ($4.19 billion), citing more loans to businesses and fewer bad debts.

The figures exceeded market expectations and underscored Australia's strong economy compared to many Westernized countries that are still mired in recession or clawing their way out.

The net profit of AU$4.22 billion for the year ending Sept. 30 compared to $2.59 billion for the year-earlier period.

Bad and doubtful debts for the year were AU$2.3 billion, 40 percent lower than the same period a year earlier. NAB said its business banking and wealth management sectors were the other key contributors to the profit figure.

The higher profits came despite a 1.6 percent fall in revenue to AU$16.6 billion, which the bank said came mostly from its personal banking business and volatility in global investment markets.

CEO Cameron Clyne said demand for credit for small and medium businesses were improving — a sign of economic health. NAB is Australia's largest lender to businesses.

"We feel that the economy is probably going to strengthen in 2011, but the big question is when does that strengthening economy translate into business confidence and translate into investment," Clyne said.

NAB shares rose about 3 percent after the earnings were published, to AU$25.49.

NAB is one of Australia's so-called "big four" banks that dominate the country's lending. Two of the others, Westpac Banking Corp. and ANZ Banking Group Ltd., are due to report their latest earnings this week. The other one, Commonwealth Bank of Australia, reported net profit of $AU5.6 billion in August.