Join our daily newsletter At The Bell to receive exclusive market insights
- As the latest big bank to enjoy the spoils of a reopening economy, NAB (NAB) has reported promising results for the first half of the 2021 financial year
- While revenue increased just 1 per cent compared to last year, cash earnings jumped 94.8 per cent from $1.7 billion to $3.34 billion
- Better-than-expected market conditions also allowed NAB to write-back a credit impairment of $128 million
- The strong performance mirrors that of Westpac (WBC) and ANZ (ANZ) and doubled NAB’s interim dividend to 60 cents per share
- NAB is down 0.73 per cent to $27.17 per share
As the latest big bank to enjoy the spoils of a reopening economy, NAB (NAB) has reported promising results for the first half of the 2021 financial year.
While revenue increased just one per cent compared to last year, the most notable figure was a 94.8 per cent jump in cash earnings, from $1.7 billion to $3.34 billion.
Better-than-expected market conditions also allowed NAB to write-back a credit impairment of $128 million, compared to bad debt charges of $1.16 billion last year.
The strong performance mirrors that of Westpac and ANZ, which announced their first-half results earlier this week and doubled NAB’s interim dividend to 60 cents per share.
Of its four core divisions, NAB’s Corporate & Institutional Banking segment was the top performer with a 15.7 per cent increase in cash earnings. The bank cited improved outcomes across the majority of key drivers, including increased margins thanks to a greater level of risk and pricing discipline.
Its Business & Private Banking division, on the other hand, saw a 10.3 per cent drop, due largely to the low interest rate environment and higher operating expenses. However, these impacts were partially offset by lower credit impairment charges.
While Australia’s vaccine rollout and strong health outcomes are cause for optimism, Chief Executive Ross McEwan said risks do remain.
“The recovery is not even and some customers, such as those in international travel and hospitality, particularly in CBD areas, still face significant challenges,” he said.
“Longer-term outcomes for these customers depend on a number of factors expected to become clearer in the coming months.”
Across the pond, NAB said New Zealand’s economy experienced a very strong rebound in the September quarter, but has since pulled back due to the absence of international tourists. However, momentum is still strong in some parts of the economy, including construction.
NAB is down 0.73 per cent to $27.17 per share at 10:32 am AEST.
