Mark-to-market losses cut the December 2012 quarterly profit of National Australia Bank to A$1.26 billion, the bank said yesterday. NAB reported a net profit of $1.6 billion in the same quarter last year. On the alternative measure of cash earnings, NAB said its profit was approximately $1.45 billion for the quarter. Cash earnings in the same quarter a year ago were $1.4 billion. The bank earned an average of $1.35 billion each quarter in the 2012 financial year.Profit increased in NAB's wholesale and business bank but fell in retail banking because of a seasonal rise in the bad debt charge. Cash earnings also increased in New Zealand. The charge for bad and doubtful debts for the quarter was $554 million, a slight increase on a year ago but down on the most recent quarters.Revenue in the December 2012 quarter increased by three per cent, NAB said, "reflecting strength in wholesale banking and an expanded customer margin."Expenses increased four per cent, driven by "continued investment in the Australian business" combined with "wage increases and lower performance based remuneration."NAB said staff numbers, on a full-time equivalent basis, fell by around 500 over the quarter, with most of the job cuts being in the UK, where NAB is reshaping its Clydesdale Bank business.In the UK, "cash earnings improved" in the quarter relative to the pro-forma profit for that division (which overlooks the losses on property lending shifted to the group balance sheet). Operating expenses were lower in the UK and lending volumes "broadly stable with mortgage growth offsetting lower business lending."The bank raised $8.6 billion of term wholesale funding over the quarter.NAB skipped a conference call on its quarterly update, but said it will hold a market briefing on March 13, to review the bank's technology program and to "refresh the group's strategic priorities."