By Stuart Condie

SYDNEY--National Australia Bank Ltd. reported a 47% drop in annual net profit as Australia's third-largest lender was hit by the impact of the coronavirus and again made provisions for customer remediation.

The bank on Thursday said net profit for the 12 months through September fell to 2.56 billion Australian dollars (US$1.83 billion), compared with A$4.80 billion a year earlier.

Cash earnings--a profitability measure tracked closely by analysts--fell by 37% to A$3.71 billion. Excluding notable items that also included provisions against the impact of the coronavirus pandemic and a payroll blunder that led to some employees being underpaid, cash earnings dropped by 26% to A$4.73 billion.

The bank cut its final dividend to A$0.30 per share for a full-year payout of A$0.60, compared with A$1.66 in fiscal 2019.

"Stronger provisions are the right thing to do but have impacted fiscal 2020 cash earnings," said Chief Executive Ross McEwan, who took over in December 2019 after Andrew Thorburn quit in the wake of a quasi-governmental inquiry into the banking sector.

Cash earnings from personal banking rose by 9.5% to A$1.38 billion on home loan repricing and lower funding costs, but fell at NAB's business, institutional and New Zealand units.

NAB said net interest margin fell to 1.77% from 1.78% a year earlier. That was in-line with analyst consensus, according to data compiled by FactSet.

Revenue fell by 1.4%, with the lender citing low interest rates and coronavirus impacts including fee waivers and lower activity among card users and merchants. NAB was among lenders to cut some lending rates after the Reserve Bank of Australia this week lowered the cash rate to a fresh record-low 0.1%, a move that analysts have said will increase pressure on bank margins.

It reported a CET1 capital ratio of 11.47% at year-end after the impact of one-off items, which included A$1.86 billion in forward-looking provisions.

Expenses rose by 2% excluding notable items, missing the lender's own target of broadly flat costs. NAB said it anticipates expenses growth of 0%-2% in fiscal 2021.

NAB in April reported a 51% fall in first-half cash earnings on A$1.04 billion of one-off items, including A$807 million of coronavirus provisions.

With global markets roiled by the pandemic and associated lockdowns, it then raised about A$4.25 billion in equity via an institutional placement and share purchase plan, before last month announcing another A$642 million in second-half notable items.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

11-04-20 1703ET