Steph Chalmers

They prefer to look at something called cash earnings, which strips out

one-off effects they say so that cash profit was coming in more steady around 3.58 billion and that was slightly below forecasts so I think that's why we've seen the share price fall today as we know a lot of share price movements are down to expectations versus reality and I think um

It came in slightly below consensus forecasts, but it doesn't seem like there's anything too much to panic there in the results.

We had business lending and home lending growing.

And the fall, that 19% fall in NAB's statutory net profit was down to some one-off charges that they'd already flagged with the market.

So one of them was around provisions, so kind of financial contingencies for things that could happen if we see the Middle East war drag on.

So putting more money aside to cover potential losses from, I guess, people falling behind on loans and that sort of thing.

And then there was also a one-off charge to do with their software accounting, which sounds very boring, but actually is kind of interesting.

Exactly.

So it's to do with software capitalisation.

So capitalisation is something in accounting where companies will be, rather than booking a huge expense in one financial period, they say, hey, this is actually an asset to our company and then they spread that out over the coming years.

years ahead.

So for something like a piece of software, they might say, we expect to use this over 10 years, so we're going to have it on our balance sheet as an asset for that length of time.

And what NAB's now done is said, technology is actually moving much faster than we had previously thought.

So that software isn't going to be adding value to our balance sheet for as long as we thought.

So they've rearranged their finances essentially to account for some of that technology

becoming outdated quicker than they thought for having a lower value.

And they've also increased the threshold for when they will

use that accounting process from $5 million to $20 million.

So I guess reflecting the fact that perhaps software is becoming more expensive, more complicated.