ASX Announcement - Trading Update by the National Australia Bank - 14 July 2004

Chief Executive Officer of National Australia Bank, Mr John Stewart, today announced a trading update for the remainder of the 2004 financial year.

Cash earnings before significant items for the six months to September 30 are expected to be 10 to 15 per cent lower than the March 2004 half year result of $1.85 billion.

"It is too early to forecast for the 2005 financial year.  As I said in May it will take 12 to 24 months to get our banks really motoring and so I do not expect any real improvement in the first half of 2005," he said.

This outlook reflects more than the impact of the recent foreign exchange losses.

Other important issues include:

• In our retail bank in Australia we have forgone income and incurred expenses protecting the franchise.  This has been successful in retaining customers. 
• A number of short term initiatives to meet financial targets which impaired our ability to fully leverage investments.
• Non-discretionary compliance driven expenditures associated with Basel II and the International Financial Reporting Standards.

"My assessment is the National's Australian franchise requires a period of targeted attention in order to achieve sustainable growth for the future," he said.

"There has undoubtedly been a loss of competitiveness in the National's businesses but it is my objective to put this bank on a path of growth driven by earnings."

The National expects to maintain its dividend at 83 cents in the second half.

 
For further information:

For Media contact:     

Brandon Phillips     

03 8641 3857 work     
0419 369 058 mobile

Samantha Evans

03 8641 4982 work
0404 883 509 mobile
 

For Investors contact:

Callum Davidson     
Head of Group Investor Relations   

03 8641 4964 work     
0411 117 984 mobile     

Hany Messieh
Manager, Investor Relations

03 8641 2312 work
0414 446 876 mobile