National Australia Bank's transition back to an Australia and New Zealand-focused business is almost complete after the lender confirmed it will sell off its unprofitable UK subsidiary in February.
Announcing a 15.5 per cent lift in full year cash profit to $5.84 billion, NAB said on Wednesday it will float Clydesdale Bank and sell 80 per cent of its underperforming life insurance arm to Japan's Nippon Life for $2.4 billion.
The proceeds of the NAB Wealth sale to Nippon Life is expected to lift the bank's tier one capital ratio by 50 basis points.
NAB already raised $5.5 billion in capital through a new share offer earlier this year and, like its big four rivals, will raise its standard variable mortgage rate to help cover the cost of new capital requirements.
While cash profit for the 12 months to September 30 was a 15.5 per cent increase on last year's $5.06 billion, a $6.34 billion net profit was below many analysts' expectations of a figure in excess of $7 billion.
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At 1255 AEDT, NAB's shares had dropped 46 cents, or 1.42 per cent, to $31.96.
NAB also announced the long-awaited timetable for the demerger and initial public offering of its troubled UK subsidiary Clydesdale in February, which has been a drag on performance for years.
"We will have exited all our low returning offshore businesses, allowing us to fully focus on serving our priority customer segments and leveraging the investments we have made in Australia and New Zealand," chief executive Andrew Thorburn said.
NAB also confirmed it had agreed to sell the majority of its life insurance business, retaining the remainder.
"Our wealth business has delivered significantly improved results since 2013, which has enabled us to secure the long term partnership we are announcing today," Mr Thorburn said.
"This partnership will enable us to continue to deliver insurance solutions to our customers while improving wealth returns for shareholders."
NAB'S PROFIT JUMPS
* Net profit up 19.7pct to $6.34bn
* Cash earnings up 15.5pct to $5.84bn
* Final dividend 99 cents per share
