News: National Australia Bank has posted its financial results for the financial year ending September 30 2013, according to WA Today. The company saw cash earnings rise by 9.3% year-on-year (y-o-y), coming in at US$5.6bn. The company saw its bad debt provisions drop by 26% y-o-y, falling to US$1.8bn. The fall in bad debt provision was attributed in part to the improvement of the UK banking sector.
BMI View: Australian banks have received yet another boost as funding costs have edged lower on the back of the Reserve Bank of Australia's (RBA) latest 25 basis points (bps) rate cut. Despite this, we maintain our downbeat outlook for the sector, as the slowdown in Australia's mining sector is likely to add to the difficulties that a downturn in the housing market are beginning to bring, adversely impacting the balance sheets and cashflows of financial institutions.