NAB’s H1 profit tops estimates

Bloomberg

National Australia Bank Ltd’s (NAB) first-half profit beat analyst estimates as Australia’s largest business lender saw the fastest growth in loans to companies since 2008.
Cash earnings rose to A$3.48 billion ($2.5 billion) in the six months ended March 31, topping the A$3.41 billion estimate of seven analysts surveyed by Bloomberg. National Australia will pay an interim dividend of 73 Australian cents per share, also higher than forecasts.
Strong underlying momentum in Australia’s economic growth and elevated inflation saw the country’s central bank this week lift interest rates for the first time since 2010. With more hikes expected this year, that’s helped spur optimism for bank margins.
The bank saw “increased customer activity across all divisions of the bank, including the fastest growth in business lending since the GFC,” National Australia Chief Executive Officer Ross McEwan said in the statement, referring to the global financial crisis of 2008.
The lender also said it is no longer targeting absolute cost cuts for 2023 to 2025, citing the transition to an outlook for higher interest rates, growth and inflation.
“The lift in our 2022 interim dividend reflects progress of our strategy, confidence in the sustainability of our performance and our continued optimism in the medium term outlook for the Australian and New Zealand economies,” McEwan said.
Meantime, profit for broad business and private banking grew 17.5% compared to the first half of 2021 on higher fee income and lower credit impairments, according to the statement.
The firm’s net interest margin declined to 1.63%, in part a reflection of competitive pressures.