Chaney bullish on NAB's progress National Australia Bank has made significant progress in rectifying mistakes of the past decade, chairman Michael Chaney says, although the bank remains cautious about business credit growth and Australia's economic outlook. Mr Chaney told reporters after a fiery annual general meeting in Melbourne that NAB expected economic growth of 2.25 to 2.5 per cent next year, which is below trend and would lead to a rise in the unemployment rate to as much as 6.5 per cent. His comments are consistent with the latest Treasury forecasts, which tipped unemployment would rise to 6.25 per cent, from 5.8 per cent now. Declining to provide a forecast for business credit growth, Mr Chaney said: "We've felt for the last few years that we'd get 5 or 6 per cent, as have the other banks, and it hasn't occurred. We were hopeful this year that business credit growth would pick up ... it depends on confidence. NAB is Australia's biggest business lender. Rival Westpac last week said business credit growth would likely fall to the lower end of the 2 to 3 per cent forecast, despite a recent increase in confidence. Mr Chaney said continued record profits - NAB in October posted a 9 per cent increase in cash earnings and a bigger dividend - relied on innovation, cost control, and ensuring the bank was "able to provide the sort of services the future banking world is going to require." Earlier Mr Chaney agreed with shareholders that NAB had underperformed peers over the past decade, attributing this to troubles in its British business, the options trading scandal of 2003 and 2004, and the effects of the financial crisis, particularly the blow-up of CDOs (collateralised debt obligations). But Mr Chaney said NAB had outperformed over the past year, and recent visits to the bank's 25 larger shareholders had revealed strong support for its strategy. "There's always a voice at these meetings from people who bought their shares many years ago and they look, understandably, back at performance over a long time, and you can't dispute it," Mr Chaney said. But the turnaround was progressing nicely. I think we're a fair way down the track, [the bank's] in very good shape under [CEO] Cameron's [Clyne] leadership, with a terrific team around him. The investments we've made are starting to pay off, the strategy we adopted in the UK is paying off now, profits are increasing, and we've made long-term investments in systems ... it positions us, we think, for where we need to be in the future. Most motions passed, including the remuneration report and issue of performance rights to Mr Clyne. As the industry prepares for the Abbott government's financial system inquiry, Mr Chaney also joined the growing group of bank leaders to criticise the increasing regulatory burden, saying there had been an "explosion." He welcomed the government's promise to institute a three-year freeze on new regulation in the sector. "Any new regulation has got to take into account the potential impact on Australian banks' ability to be competitive in a global market and keep lending money," he said. With Clancy Yeates