National Australia Bank flags writedowns on UK arm

National Australia Bank on Thursday flagged writedowns of more than US$1 billion ahead of its full-year results as its British division continued to weigh on profits.
The bank expects a 14 percent fall in cash profit to between Aus$5.1 billion (US$4.5 billion) and Aus$5.2 billion in the year to September 30, from Aus$5.94 billion in the previous corresponding period.
The writedowns include British charges of 670 million pounds (US$1.1 billion) for two compensation programmes and an impairment charge of Aus$297 million for the introduction of costly software.
NAB has been restructuring its struggling British businesses, particularly the Clydesdale and Yorkshire banks.
The bank also took a deferred tax asset provision of US$120 million in the United States.
NAB chief executive Andrew Thorburn said the writedowns were "disappointing" but were "being dealt with transparently and quickly" and that the firm's underlying performance "remains strong".
"Taking these decisions gives us more clarity going into the future and allows us to focus on the core Australian and New Zealand franchises, which remain in good shape," he said in a statement.
NAB is due to report its full-year results on October 30.