Comment: NAB matches ANZ for return on equity

One reason for the investment community's perpetual disappointment with National Australia Bank has been put to rest, to some degree, by the group's March 2015 half year profit.
 
A return on equity of 14.7 per cent for the half is no disgrace - unless you're running ANZ, which also reported a return of the same level this week.
 
NAB wanted to merge with ANZ in mid-2008  (a detail confirmed by former treasurer Wayne Swan in his book 'The Good Fight').
 
NAB understood it threatened to tap the mat as the financial crisis unfurled. It was seeking the protection of a merger with a stronger and more credible bank, in the same manner that St George had surrendered to Westpac earlier that year.
 
Swan said "No" and NAB wandered, supremely vulnerable, into the worst of the GFC.
 
Like Westpac and Macquarie, NAB scurried to drink its fill on the US Fed's funding lines for global banks that was one of the centrepieces of the central banks' response to the crisis.
 
This trio depended more than any other banks on the combination of US aid and the Australian government's guarantees on deposits and wholesale funding - a systemic threat largely shielded from public view at the time.
 
As the countdown to the GFC began, NAB featured all the weaknesses that the bank is only now satisfactorily resolving.
 
NAB's trouble-prone story - dating from the Homeside fiascos put in place during the Don Argus era, through to the forced writedowns on its CDOs during the financial crisis and, more recently, its various UK debacles and write-offs - will long be its legacy.
 
It's fortunate to be an independent business at all, with its patchwork history destined to drag on investor enthusiasm long into the future.