Australia’s NAB beats cash profit estimates on loan growth, rate hike

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  • Cash profit for the year A$7.10 billion, up 8.3%
  • Total annual dividend of AU$1.51/share
  • Rise of the house, business loans increase income

Nov 9 (Reuters) – National Australia Bank (NAB.AX), the country’s second-largest lender, posted better-than-expected annual cash profit on Wednesday, helped by robust growth in personal and business loans and buoyant margins by rising interest. rates.

The lender warned continued economic uncertainty, stemming from rising interest rates due to soaring inflation, could challenge some customers, but was confident it would remain strong with strong employment and savings substantial for households and businesses.

However, rapidly rising interest rates and inflation could impact household budgets, dampening consumption and overall growth, chief executive Ross McEwan said.

In the year to September, increased business lending volumes and a 7% growth in Australian home loans helped the bank record cash income of A$7.10 billion (4. $62 billion), higher than A$6.56 billion a year earlier and beating analysts’ estimate of A$7.08. billion according to Refinitiv Eikon.

“This result reflects continued execution of our strategy, including targeted volume growth and a disciplined approach to cost management while investing for growth,” McEwan said.

Australia’s ‘big four’ banks experienced a housing lending boom in the first half of the year as record-low rates and a pandemic-fueled shift to remote working boosted property markets.

By contrast, recent aggressive policy tightening has helped boost margins, but left them vulnerable to a slowdown in their core mortgage lending business.

Banks also faced higher spending amid rising cost-of-living pressures, falling house prices and wage inflation. read more read more

NAB’s stressed loans, whose interest payments were delayed for more than 90 days, fell to 0.66% from 0.94% last year. Net interest margin, a key indicator of profitability, increased 1 basis point to 1.65% on an adjusted basis.

The Melbourne-based bank declared a final dividend of 78 Australian cents per share, up from 67 Australian cents each last year.

($1 = 1.5380 Australian dollars)

Reporting by Sameer Manekar and Harish Sridharan in Bengaluru; Editing by Shailesh Kuber

Our standards: The Thomson Reuters Trust Principles.

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