National Australia Bank posted a 7 percent rise in third-quarter unaudited cash profit on Monday, led by higher mortgage growth and lower bad debt charges, while flagging higher provisions for its troubled UK business.
NAB, the nation's fourth biggest bank by market value, said it will need to make an additional provision of at least 245 million pounds ($410 million) for its UK operations for both interest rate hedging products and payment protection insurance.
NAB's British business, which includes Yorkshire and Clydesdale bank branches, has been weighing on its performance and investors are watching for the bank's potential exit from the UK assets.
CEO Andrew Thorburn also cautioned that a Scottish vote in favor of independence next month may lead to "significant additional costs and risks for Clydesdale Bank."
Scotland votes on Sept. 18 on whether to end 307 years of union with England and leave the United Kingdom. Polls suggest that the campaign to reject independence has a substantial lead, although as many as a quarter of the electorate are undecided.
NAB reported unaudited cash earnings, which exclude one-offs and non-cash accounting items, of A$1.6 billion ($1.49 billion) for the quarter to end of June. It did not give a year-ago comparison in its trading update, which does not provide as much detail as a full earnings statement.