Out of all of the blue chips on the ASX, National Australia Bank Ltd (ASX: NAB) has one of the largest dividend yields – but is the NAB share price a buy?
The NAB share price has been on a bit of a rollercoaster this year, but it has been a good one, it has risen 20% in 2019 so far.
We saw a NAB dividend cut earlier this year from $0.99 per share to $0.83 per share. I expect that the final dividend payment will be at least $0.83 per share, perhaps a little lower. In its FY19 result Australia and New Zealand Banking Group (ASX: ANZ) reported that conditions remain challenging and its Australian mortgage arrears continued to rise, we are probably going to see the same thing from NAB when it reports soon.
But, for some investors, NAB is now their favourite big four bank compared to ANZ, Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA). The reason for the NAB preference is the new leadership team of CEO Ross McEwan and chairman Philip Chronican.
Both have good banking experience. Mr McEwan in-particular has a good CV for the NAB role because he has been the CEO of Royal Bank of Scotland since 2013 and has led the organisation through significant change and recovery.
Mr McEwan has Australian experience, he was Group Executive at CBA for retail banking services for five years. Before that he was CBA's Executive General Manger with responsibility for its branch network, its contact centres and third-party mortgage brokers.
Foolish takeaway
How influential can management be on a company's profit and dividend? They can be very important. It will take time for the change in culture to work its way through the bank, but NAB could be set up for a long-term recovery.
However, it's hard to ignore the fact that NAB still faces plenty of difficulties from more remediation, more legal action and higher capital requirements. I wouldn't want to own bank shares today for growth or income.
