Writing of St George Bank’s profit last week, one of The Australian‘s business columnists, Tim Boreham, wrote, “It’s a great time for bank
accountants. It’s also salad days for analysts and fundies, as they can pluck
the most convenient figure from a bank’s presentation to justify their
investment thesis.”

That sentiment applies in spades to the profit of National Australia Bank,
where the bank’s presentation of comparative profit data left followers a little
hazy on just what growth in profit the bank was trying to report.

NAB said that it recorded a net profit for the half year of $1.84 billion, an
increase of 15% on its profit of $1.60 billion in the September 2005
half and an increase of 14% on its profit of $1.62 billion in the March
2005 half.

The group’s reported profit is still less than that reported in the March
2004 half year, one reduced by the then recent foreign exchange trading losses
and prepared under the former accounting standards.

The bank said its return on equity increased 15.4% in the March 2006
half from 14.0% in September 2005 but still less than 15.6% in
the March 2005 half. Using reported cash earnings, the increase in ROE was more
favourable, rising to 17.4% from 14.9% six months ago.

Peter Fray

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