Diabolical investment markets in the half year to March 31 cut into profits for National Australia Bank wealth management division MLC, but analysts say the results aren’t bad under the circumstances.

MLC’s $539 million net profit for the period was down 17% on the previous corresponding period while the reversal of mark-to-market gains on assets backing the insurance portfolio helped bring insurance net income down by 7% to $204 million.
 
This is despite strong insurance sales which took annual in-force premiums up 11%.
 
MLC also lowered operating expenses by 2% over the period, to $330 million.

Credit Suisse analyst Arjan van Veen says the lower expenses are creditable, given MLC’s comparatively fixed cost base.   

“The insurance business had good topline growth at 11%, although given the strength of growth in that market at the moment it’s below par. But you never complain about double-digit growth,” he told insuranceNEWS.com.au.

Morningstar Head of Equity Research Peter Warnes described the MLC results as being in line with market competitors, given the hammering equity markets took over the period.

“Overall, nothing’s flash but it’s all right,” he said.