National Australia Bank on Wednesday reported a large decline in full-year profits to A$2.59bn ($2.4bn) after a surge in bad and doubtful debt charges.

The Australian lender said net profit fell 43 per cent after debt charges ballooned from A$1.5bn to A$3.8bn. But it said there were signs that problem loans were stablising and the increase in charges had moderated during the second half.