You would have heard me by now praising CBA’s disclosures, so I will not bore you again with them. OK, I will – yay, CBA. Keep at it. It is just a pity the government guarantee means that you will not be rewarded for it, but, chin up, it will go soon (I hope).


Just a quick reminder here, though. All of the numbers and discussion below is given relative to other banks in Australia. If you compare these numbers to almost any other in the world today you will find the Aussies are far better than most. None of the Oz banks are even trading close to making a loss. Westpac, for example, had the best return on equity of any major bank anywhere last year – and the others are not far behind.


The numbers from these two, though, are a study in contrasts, While they have much the same sized portfolio overall (NAB is slightly bigger overall), CBA is more weighted towards the housing end and NAB towards business. In the good times, this served the NAB well in profitability, but it is now hurting in terms of impaired assets and arrears. NAB, despite having only about 16% bigger book (in EAD terms) has about 50% more impaired assets. It also has more loans at over 90 dpd, although CBA, because of its bigger book size, has more residential mortgages overdue. Oddly, though, this has not followed through into the impaired category. My guess here is that many of the NAB’s residential mortgages were used to back business loans, which have been more likely to get impaired quickly.

The rest of the assets story is more or less as you would expect. NAB has many more of its assets in the Standardised categories, mostly because they have substantial overseas assets that they (presumably) have not been able to get a model approved for as yet. If they do not soon do so it may make sense to dispose of them to someone that can.

Overall, 22% of their assets are held in Standardised portfolios, as opposed to 6% average for the others. more work required here, I would have thought.

None of the rest is startling, So I will put some more push into completing the analysis on the overa

ll comparison.