The bank has announced additional remediation charges of $525m after tax. This is expected to reduce first-half cash earnings by an estimated -$325m.
The bank has also announced it will review dividend settings. Credit Suisse considers this an interesting statement and believes a cut to $0.90 per share per half year would reflect a more sustainable level.
The decision will be made at the first half results on May 2. Neutral rating maintained. Target is reduced $26.50 from $29.00.
Target price is $26.50.Current Price is $25.27. Difference: $1.23 – (brackets indicate current price is over target). If NAB meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).