Second half loss for NAB

The profit highlights of National Australia Bank for 2009 are principally lowlights, and feature skinny profits in Britain and New Zealand, bad debts escalating as rapidly in the second half as in the first half, and plenty of drag even on cash profits.

And then there's the minor complication of the second half profit: strictly speaking, this was a loss.

NAB's cash earnings fell 11 per cent over the second half to $1.8 billion but fell only two per cent over the full year to $3.8 billion.

The statutory profit for the second half was, as mentioned, in fact a loss of $75 million following a statutory profit of $2.7 billion in the March 2009 half.

Some wire service reports yesterday did highlight the loss rather than the cash profit, though most other reports yesterday overlooked this.

There's a long list of losses-that-aren't-losses in the NAB profit pack for the second half, including $555 million for fair value and hedge ineffectiveness, $542 million for losing a long-running tax wrangle in New Zealand and which NAB hopes to still not pay, $344 million for revaluation of treasury shares and $309 million on an Australian tax wrangle that NAB accepts it will have to wear.

Then there's a $64 million "provision for litigation", and typical of the kind of everyday expenses that ought to be factored in to any half plausible measure of a bank's cash profit but are not.