National Australia Bank (NAB) will refocus its energies on its hometown market, where the economy is faring better than others, to support its business through the global financial crisis.

New chief executive Cameron Clyne on Thursday laid out his strategy to steer the country’s third biggest bank through the recessionary conditions that have already taken a hefty toll on its overseas counterparts.

The main message from the Mr Clyne, who at 40 is the youngest of the big four bank chiefs, was one of safety first.

“We can’t control the market but we can control our response,” said Mr Clyne, who stepped into the job in January.

“What we will do is run the bank conservatively, keep the bank safe.

“We will focus on Australia - it’s our core market and generates the majority of our earnings and if Australia performs well, the bank will do well.”

The prudent message was welcomed by investors, who lifted the 151 year old bank’s stock by almost three per cent to $16.73. The shares had reached a 12-year low of $16.03 on March 9.

But there will be some pain, after NAB said it would cut its first half dividend by a quarter, from the 97 cents paid in the second half of 2008, to increase its cash on hand and give it a balance sheet buffer.

Mr Clyne’s strategy comes after two of NAB’s larger rivals, Commonwealth Bank of Australia and Westpac, last year significantly boosted their presence in Australia by taking over major regional banks.

In contrast, ANZ, the fourth ranked, continues to pursue growth in Asia with the aim of becoming a super regional bank.

The focus on Australia makes sense for Melbourne-based NAB as its other major markets, New Zealand the UK and US, are all facing worse economic downturns.

NAB also wants to leverage its banking relationships with businesses and wealthy individuals to increase revenue from products such as wealth and asset management.

It is also putting in place incentives for its business bankers to stay with clients over the longer term.

NAB’s head of business banking Joseph Healy noted on Thursday that returns from customers significantly increased after the third year of a relationship with their banker.

Mr Clyne said NAB would be employing 150 to 200 new business bankers to speed up the growth of the business.

He didn’t rule out jobs cuts at the group but said ” “none of our businesses are working to job reduction targets.”

Mr Clyne admits NAB will have to work hard on building its customer relationships.

“The public’s perception of banks and their service levels is very poor and we have to take accountability for that … and that’s something we’ve got to face,” he said.

But while NAB was placing more emphasis on Australia, Mr Clyne said it remained was committed to its offshore units.

NAB hopes to continue to grow the operations organically or through acquisition, particularly in the UK and US, where many rivals are in deep trouble because of the financial crisis.

As part of the drive to enhance business customer relationships, all corporate lending operations will move to the respective country units of the bank.

The institutional arm, nabCapital, has been dissolved and a new division, to be known as wholesale banking, will handle markets and treasury services.

AAP