National Australia Bank’s (NAB) net profit fell 15.6% for the six months ending March 31 compared to the previous corresponding period.
The bank announced a restructure of its UK division to the ASX.
NAB’s UK business posted a £25 million ($A39.22 million) loss for the six months to March 31, down from a £77 million ($A120.79 million) profit in the previous period.
NAB CEO Cameron Clyne said there has been a significant downgrade in the growth prospects of the UK economy, reflecting the drag from weakness in the euro zone.
“The commercial property market, which had previously seen signs of recovery, has recently experienced a double dip as the recovery stalls and other banks accelerate the reduction in their CRE (commercial real estate) exposures,” Clyne said.
“This has contributed to the current downturn in the UK being longer and slower to recover than experienced in the 1930s following the Great Depression.”
NAB intends to increase the interim dividend to 90 cents per share fully franked.