National Australia Bank shares rise as earnings rise 9% on resilient lending

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A National Australia Bank (NAB) sign is displayed outside an office building in central Sydney, Australia July 24, 2015. REUTERS/David Gray

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  • Q1 cash income beats MS estimate
  • NAB upbeat on Australia, New Zealand prospects – CEO
  • Stocks track best day since November 10th

Feb 10 (Reuters) – National Australia Bank (NAB.AX) reported a 9.1% rise in first-quarter profit as growth in home and business loans at the country’s second-largest lender offset narrower margins and its shares by more than 4% brought. higher on Thursday.

NAB posted cash income of A$1.80 billion (US$1.29 billion) for the quarter ended December 31, up from A$1.65 billion a year earlier and an estimate by Morgan Stanley of about A$1.60 billion .AUD.

“NAB has started fiscal 2022 well…asset quality has remained benign and good momentum has continued across our business, although the environment remains competitive,” said Chief Executive Officer Ross McEwan.

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The bank’s loan and deposit volumes each rose A$18 billion during the quarter as it gained market share in both areas, he said, while revenue rose 8%.

Australian home and business loans rose 2.6% and 3.4%, respectively, and loans in New Zealand rose 2.2% in the quarter.

UBS analysts called it a “strong result” and said NAB’s operating performance at the preliminary operating profit (PPOP) level was well above consensus.

NAB shares rose a whopping 4.1% to A$29.54, their highest since January 18 and on course for their best day in three months, while the broader market (.AXJO) was up 0.9% lay.

McEwan added that although disruptions to supply chains and labor markets from the Omicron variant have created uncertainty, the bank is optimistic about the prospects for Australia and New Zealand.

NAB still joined its Australian peers in showing the impact of stiff competition as its net interest margin fell 5 basis points to 1.64% in the quarter.

Record low interest rates and fierce competition in the home loan market are eroding margins for Australian lenders, who are also suffering as borrowers switch to fixed-rate mortgages. Continue reading

The Common Equity Tier 1 (CET1) ratio, a closely watched measure of free cash, was 12.4% on December 31st compared to 13% on September 30th.

($1 = 1.3926 Australian dollars)

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Reporting by Shashwat Awasthi and Indranil Sarkar; Edited by Anil D’Silva and Sherry Jacob-Phillips

Our standards: The Thomson Reuters Trust Policy.

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