NAB's full-year profit has dropped 14.2 per cent to $5.7 billion after the lender booked more than $1.1 billion in restructuring costs and customer remediation.
The bank's cash profit dropped from $6.642 billion a year ago largely due to $755 million of restructuring costs and the $360 million impact of refunding and compensating customers, partly for fees-for-no-service.
Stripping out those previously announcement hits, the lender's cash profit for the 12 months to September 30 was still down 2.2 per cent on the prior corresponding period.
The customer remediation, which all big banks have been undertaking to address issues including those heard by the financial services royal commission, reduced operating income by $249 million and increased operating expenses by $111 million.
"The royal commission has raised instances where we failed to treat customers with care and respect," NAB said.
"We are determined to put things right and are taking steps to build a better bank."
Profit from the business bank, institutional and New Zealand all rose, but profit from NAB's consumer and wealth business slipped 5.8 per cent to $1.539 billion.
The bank, which was the only one of the big four not to recently impose an out-of-cycle mortgage rate rise on customers, said housing lending was up 3.0 per cent on a year ago but that margins had declined.
Overall revenue was 0.5 per cent higher and net interest margin was flat, while NAB held its final dividend at a fully franked 99 cents to keep its full-year payout the same for a fifth straight year.
"While 2018 has been a challenging year, our transformation is on track and benefits are emerging as we become simpler and faster," chief executive Andrew Thorburn said.
"We are listening and responding to customers, including to royal commission issues, and are proactively taking steps to be more customer focused, as we strive to be Australia's leading bank, trusted by customers for exceptional service."
The restructuring initiative was already bearing fruit, Mr Thorburn said, and would pay off further in years to come.
"We're investing in new technology and processes that will make the bank a lot more efficient," Mr Thorburn said.
"I would back that over the medium term to have a very significant impact."
Underlying expense growth of 6.4 per cent was in the middle of the bank's 5-8 per cent guidance range, and Mr Thorburn said costs would be flat over the next two years.
Investors were impressed and NAB's shares were the best performing among the big four banks, rising about 0.5 per cent by 1400 AEDT on Thursday.
NAB'S FY RESULTS
* Cash profit down 14.2pct to $5.702b
* Statutory profit up 5.1pct to $5.554b
* Net operating income up 0.5pct at $17.977b
* Final dividend unchanged at 99 cents, fully franked
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