Operational risks rising at NAB

One detail itemised by National Australia Bank at note 4 to its 2009 full year accounts is the "charge to provide for operational risk event losses".

NAB said this increased to $209 million in the full year and up from $44 million in 2008. The charge was a little higher in the second half than in the first.

The charge arises from the approach to measuring business risks introduced a couple of years ago (arising from the local variant of the Basel II methodology).

NAB may be taking the trouble to break this out as an expense item where other banks wrap this under some other heading (such "other" expenses).

The scale of the rise is noteworthy, though.

Either NAB have changed their methodology to include more events as operational risk losses (in which case there may be a drop in expenses elsewhere) or the bank has incurred more actual losses.
 
As they seem to have incurred more losses it must be that NAB either recognised more losses that they previously missed (which is unlikely, but possible) or there have been more, and more expensive, operational risk events over the 2009 year.