NAB reports third-quarter cash earnings of $1.7bn
National Australia Bank posted third-quarter cash earnings of $1.7 billion an increase of 10.3 percent on the year ago same period underpinned by an improved outlook for business and lower loan losses.
“Our performance this quarter is encouraging,” said NAB chief executive, Ross McEwan, adding that the bank wrote back $112 million of previously booked bad debts.
McEwan said there was strong momentum across the business. In Australia, he said, housing lending rose two percent and business lending grew 4.3 percent. NAB's New Zealand business also delivered robust growth with lending up 2.7 percent on the quarter.
“These outcomes are a result of the decisions and investments we are making, which are having a positive impact for customers and colleagues,” he stated.
The NAB chief executive said that continued Covid outbreaks and lockdowns are creating uncertainty and challenges for some of the bank’s customers.
"Through this, we will support them while keeping the bank safe," he said.
“However, we remain optimistic about the long-term outlook for Australia and New Zealand,” he said.
“The strong economic momentum leading into this period, ongoing government support, and customers’ relatively healthy starting positions give us confidence that once restrictions are eased, the economy will bounce back.”
McEwan pointed out that the exit of MLC Wealth has been completed, and the acquisitions of 86 400 and Citigroup’s Australian consumer business will help accelerate NAB’s growth strategy.
“We have a clear focus on where and how we will continue to grow.”
When compared to the quarterly average of the first half of 2021, the result looks less rosy. Cash earnings increased one percent, revenue and costs both fell one percent, but the net interest margin was broadly stable. However, the NIM increased slightly when stripping out markets and treasury income.
The bank’s common equity tier one ratio now stands at 12.6 percent - up from 12.4 percent at the end of June.
NAB recently announced a $2.5 billion on-market share buyback following ANZ which launched a $1.5 billion buyback and Commonwealth Bank which will return $6 billion to shareholders through a share buyback.