National Australia Bank cash profit up 15.5 percent, sells UK business

The National Australia Bank on Wednesday posted a 19.7 percent rise in annual net profit while announcing a majority of its life insurance arm and its failing UK business would be sold.

The National Australia Bank (NAB) made withdrawing from low-returning off-shore business a priority when the bank's chief Andrew Thorburn took over in August last year, in an effort to close the gap to its three main rivals.

Three-quarters of NAB's UK businesses will be offered to existing shareholders while remaining shares will be sold in an IPO, to be completed in early 2016.

The UK arm has consistently weighed on the group's earnings, with the bank forced to set aside over 700 million U.S. dollars to cover its UK businesses interests against charges to its payment protection insurance and interest rate hedging products.

The bank also confirmed media speculation that 80 percent of its life insurance arm would be sold to Japanese company Nippon Life for 2.4 billion Australian dollars (1.73 billion U.S. dollars).

Net profit for the 12 months to September was up 19.7 percent on the previous year's 5.3 billion Australian dollars (3.81 billion U.S dollars).

Cash earnings - excludes one-off and non-cash accounting- increasing 15.5 percent to 5.84 billion Australian dollars (4.20 billion U.S. dollars), lower than the over 7 billion Australian dollar (5.03 billion U.S dollar) market expectation.

Profit increases come as Australia's major banks increased retail interest rates to cover the increase costs of new regulatory requirements to hold more capital.

At 1110 local time (AEDT), NAB shares were down 1.82 percent to 31.83 Australian dollars (22.89 U.S. dollars). Enditem