National Australian Bank sharply cuts dividends in pandemic

US, WASHINGTON (ORDO NEWS) — The Australian National Bank (NAB), amid the crisis caused by the COVID-19 pandemic, raises Australian $ 3.5 billion ($ 2.2 billion) of capital and cuts its dividend by almost two-thirds.

As NAB Executive Director Ross McEwan told investors, the bank is taking active steps to combat the “quick and unprecedented shock” caused by the pandemic, which has already led to a 51% decrease in profit in the first half of 2020 compared to last year.

“Measures to curb the spread of COVID-19 had a sudden and significant negative impact on economic activity,” McEwan said.

“As for Australia, we expect GDP to decline by 8.4% by September 2020 compared to December 2019 and not return to its pre-pandemic level by early 2022. Unemployment is expected to peak at 11.7% in mid-2020,” added the head of one of Australia’s largest credit organizations. In addition, bank experts expect a 10% drop in housing prices this year.

NAB, Australia’s second largest bank by market capitalization, reported a 158% increase in expenses related to credit losses over the past six months.

Net profit of the bank decreased to $ 1.3 billion over the past 6 months (until the end of March), while over the same period last year it amounted to $ 2.6 billion. NAB’s interim dividends will be 30 cents per share, a year ago their size was 83 cents per share.

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