NAB further delays offloading MLC

National Australia Bank in its quarterly update flagged another delay to the separation of MLC Wealth.

NAB said that due to a challenging business environment, the separation of MLC Wealth may be delayed beyond financial year 2020.

"Work on operational separation has progressed well but the business environment remains challenging," it said.

"This may defer exit beyond FY20. Any transaction remains subject to market conditions, regulatory and other approvals."

However, NAB said it continues to make progress towards a separation of MLC Wealth.

"We are targeting a public market exit but will also explore alternative transaction structures and options," it said.

"To assist our exit, our focus includes client remediation, operational separation and enhancing long term business sustainability.

"NAB will take a disciplined approach to the exit of MLC Wealth and will execute a transaction at the appropriate time having regard for the interests of all stakeholders."

Remediation of MLC Wealth advice clients and a reshape of the wrap business model along with a rebrand to MLC Advice are understood to be recent milestones in the path to separating the businesses.

At NAB's FY19 results, then acting chief executive Philip Chronican said that the bank had originally hoped to de-merge during 2019.

"Obviously as we fully grasped the size of the remediation work that was inappropriate because the business wouldn't have been ready to be separated," Chronican said.

"Because obviously we can't separate the business until those issues are appropriately dealt with."

In its latest results, NAB also announced an unaudited statutory net profit of $1.7 billion and a 1% cash earnings growth compared to first quarter 2019.

"Twelve months on from the conclusion of the Royal Commission, we remain focussed on building confidence and trust in our bank by addressing legacy issues where customers were treated poorly," NAB chief executive Ross McEwan said.

"Customer-related remediation programs and regulatory compliance investigations (including associated enforcement actions and class actions) are continuing, with potential for additional charges although amounts and timing remain uncertain."

Read more: NABMLC WealthPhilip ChronicanMLC AdviceRoss McEwan
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