After two months' silence, National Australia Bank's new chief executive Cameron Clyne last week set the agenda for his tenure at a strategy day for investors.

One management presentation does not make a recovery. However, Mr Clyne, who was appointed in July of last year, but only started flying solo in January, has set out a plan focused on the nuts and bolts of banking.

It is an approach that appears to draw heavily on the years the former Bank of New Zealand chief executive spent traipsing around Asia's banks as a consultant for PricewaterhouseCoopers in the late 1990s and one that investors are sure to find reassuring.

Expectations ahead of last week's meeting were not high.

On the day Mr Clyne's succession was announced in July of last year, NAB's shares fell despite a day of (relative) confidence in the Australian banking sector.

Neither Clyne or NAB chairman Michael Chaney gave any indication of a strategic shift the new man would bring to the job. This, coupled with the long handover period, suggested an unpalatable business as usual.

NAB, even before the credit market turmoil, has been the serial underperformer of the Australian banking sector.

On a raft of measures NAB's performance has been less than stellar. Its return on equity, for instance, is below the mean of its peers and its record on delivering on earnings expectations is the second worst among the major banks after ANZ.

And, setting aside the vanilla operational problems, NAB has an unfortunate history of major mishaps. These have notably included a foreign-exchange trading scandal in 2004 when four rogue traders racked up losses of $A360 million and a much heavier exposure to the sub-prime mortgage crisis than any of its peers - more on that below.

For investors the most tangible development from the presentation was a 25% cut to the bank's dividend. This is the first such cut in 18 years and follows a similar cut by ANZ.

The cut has had the immediate effect of lifting NAB's tier one capital by about $A800 million or 10 basis points to around 8.3 this year, but the other initiatives will take more time to deliver.

The biggest by far is the reorganisation of the bank's institutional business - NAB Capital. It has been divided in three: its corporate lending business is to be integrated into the group's business banking division. The remnants - made up of its specialised business banking services such as interest rate swaps, custody, project finance, treasury operations will be branded wholesale banking.

The conduit unit, which combined as much as $8.7 billion NAB loans with billions of offshore originated less-than-gilt-edged residential backed mortgage securities, will be wound down. This unit may still carry as much as $A3 billion of un-provisioned exposures.

The Australian business banking division will become the powerhouse for growth. It will seek to emulate in other states the success it enjoys in Queensland and Victoria, where it has the largest market share in business lending.

The key plank in this strategy is to make its business banking unit a one-stop-shop for all businesses, big or small. It hopes this will help it strengthen relationships with its customers, particularly by ensuring they are not passed from division to division of the bank as they grow. To put this into effect, NAB will hire an additional 200 business bankers and open 12 new business banking centres.

In personal banking NAB is looking for cost savings and operational improvements in wealth management by merging its private bank and private wealth units. A key part of this strategy is to focus at the top end of the retail market.

NAB already leads this market with customers earning more than $A80,000 a year - representing 36% of its customer base, some six percentage points higher than its peers. These moves could together boost revenue by as much as $1 billion a year, NAB says.

Mr Clyne, meanwhile, made a virtue out of necessity, by reaffirming NAB's commitment to its UK operations - Clydesdale and Yorkshire Bank. He said: "It is absolutely not in the interest of shareholders to exit our UK position."

These banks are facing some of the toughest conditions in decades. However, even if Clyne wanted to exit these businesses, there would be few takers since most of the potential buyers are now part-owned by the UK taxpayer.

The share market's enthusiasm for Clyne's plan was in sharp contrast to its reaction to his appointment. A sharp dividend cut - all else being equal - should have weighed on the NAB share price.

The plan was delivered on a day when the shares in its peers on average fell. NAB's shares, however, ended the day's trading up 2.63% to $A16.73 and are now trading at $A18.93.

Mr Clyne has already recruited a few believers.