A whopper of a lift in overall expenses in National Australia Bank's first quarter profit may draw greater scrutiny of the strategies and effectiveness of NAB management.A five per cent rise in expenses was the feature item in the bank's trading update for the December 2016 quarter, released yesterday.NAB managing director Andrew Thorburn put this down to "higher personnel costs mainly related to the timing of the October 2016 enterprise bargaining agreement salary increases and redundancies."Around three quarters of NAB's cost base is payroll, or it was in 2016.Other demanding items the bank listed as "higher project related costs including regulatory spend, and increased depreciation and amortisation."Thorburn did not point out the fixed pay increase at NAB is three per cent, a rise agreed with its staff and the Finance Sector Union late last year. NAB had 448 staff (in "full time equivalents") purged from the NAB payroll during the quarter.Many more redundancies must be in the pipeline to dampen the risk of a repeat of the dour quarterly profit headlined in the trading update."We are well advanced on a number of initiatives that give us confidence about second half productivity and cost benefits," Thorburn said.NAB said its cash earnings were A$1.6 billion, one per cent lower than the quarterly average of the September 2016 half year result and also one per cent lower than the prior corresponding period. Statutory net profit matched the cash profit.Revenue increased one per cent, said to be "benefitting from growth in lending and higher trading income."Group net interest margin was broadly stable, the bank said.The "growth in lending" phrase to some degree jars with the data in its "pillar 3" report for the quarter.NAB said in that report that it had incurred no growth in risk weighted assets since September 2016, a theme reinforced by the minimal change in lending levels reported via APRA on business lending.Against this backdrop NAB said it may sell a "subordinated tier 2capital security, subject to market conditions, including any competing supply."