Cash earnings were down 36 per cent to $3.7 billion.

The result was tarnished by $2.7 billion in provisions, falling revenue, rising expenses and a big drop in its business and private banking division.

Chief executive Ross McEwan said the three big areas of impact were COVID-19, a low interest rate environment and fewer people wanting to borrow because of the economic uncertainty.

But he said the company was in a strong position in terms of its capital and it was in a position to fund the recovery of Australian business.

The NAB will pay a 30 cent final dividend giving shareholders 60 cents for the year compared with $1.66 last year.

“There are two countries you would like to be in. One of them is Australia and the other is New Zealand and we are in both of these,” McEwan said.

“Our operating environment is evolving through the ongoing challenges and uncertainties associated with COVID-19. While economic activity has been materially impacted, the significant stimulus for households and businesses provided in the federal budget, combined with an expected more complete reopening of domestic state borders, provide a bridge to economic recovery as support is reduced.

“While we are acutely aware of the need for disciplined cost management, costs rose in 2020 as we adjusted to the COVID-19 environment and started implementing our strategy refresh announced in April.

“We are progressing well with our strategy refresh which is creating a simpler, more accountable business, committed to execution. We have embedded a new organisational structure with end-to-end accountability.

“We are clear about our priorities, and we are focusing on our customers and colleagues to drive sustainable performance over time.”

The bank said economic recovery in Australia was likely to be gradual, supported by stimulatory fiscal and monetary policy combined with expected relaxation of Victorian restrictions and a more complete reopening of state borders.

It has forecast GDP growth of 4.6 per cent over 2021 and 2.9 per cent over 2022, but stressed that the outlook for the business sector was highly uncertain and the pace of recovery was likely to be uneven across industries.

It aligned with the Reserve Bank is forecasting a peak unemployment figure of 8.1 per cent in early 2021 before a gradual but not complete recovery to 5.9 per cent by the end of 2022.

NAB’s total balance of deferred loans reached $60 billion but at the end of October, that was down to $19 billion and about. 90 per cent of customers who have exited deferrals have, or are expected to, resume repayments.