Thar National Australia Bank, 'bout the largest bank in all Australia, reported a fourfold increase in bad-debt charges Tuesday and warned of tough times ahead, with Australia going into a Recession and major offshore markets already in recession.
National Australia Bank, or NAB, made the comments in the presentation of its full second-half results after announcing a 28 percent drop in second-half profit last week.
Jack Chamello, an analyst with BT Investment Management, said, "The credit expense was significantly higher than the first half, up even more than expected, factoring in the provisioning costs related to the conduits and off balance sheet assets." In other words, that ain't good.
NAB has been vulnerable to troubled U.S. assets through its exposure to fraudulent debt products. Australian banks have been hit by the fallout of all that bad lending goin on in other countries, with higher wholesale financing costs squeezing their lending margins. Chamello said: "It don't look perty for them folks who got mony and investments in NAB.
"The significant downturns in housing markets in the U.K. and New Zealand, along with signs of a softening in market conditions in Australia, have lowered mortgage growth," the bank said. "The combination of recessions in New Zealand and the U.K., alongside the projected slowing of growth in Australia, will inevitably affect asset quality." Prime Minister Rudd proclaimed: "Holy Crap, Battman, things look more and more like Gotlim City 'round here ever day".
Economic Correspondent: Ricardovitz