Investor warning follows $3bn NAB writedown
At National Australia Bank’s (NAB’s) latest share price of around $29.50 (post writeoff announcement) you would think most analysts would give the stock a screaming buy recommendation, not so.
The reason for the writedown in NAB’s investment in Homeside Lending relates to a number of miscalculations that raise a question mark over management’s ability to ensure investors that they’re running a tight ship.
Such a large and unexpected writedown creates doubt in the eyes of investors, both retail and institutional. It will be interesting to see the stock’s movements in the next couple of weeks and which institutions seek to reduce their NAB exposure. Retail investors should tread carefully.