ASX drops, NAB flags $1.1 billion hit to earnings

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The Australian share market falls moderately in early trade as National Australia Bank flags $1.1 billion hit to its earnings.

By 10:20am AEST, the benchmark ASX 200 index had fallen by 0.5 per cent to 5,461 points.Among the best performing stocks were Flight Centre , Fortescue Metals and Nine Entertainment .They include Caltex , Sydney Airport and Southern Cross Media .

The major banks are also down, with National Australia Bank being the weakest performer in that cohort. In a statement to the stock exchange, NAB flagged that its first-half earnings would take a $1.2 billion hit. This includes $188 million worth of extra"customer remediation" costs related to the"fee for service" scandal, unearthed during the banking royal commission.This includes a change to its software capitalisation policy, which will reduce earnings by $742 million .

NAB also wrote down the value of its 20 per cent stake in MLC Life due to the"challenging operating environment within the life insurance industry", which will affect its earnings by $214 million.

 

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