NAB (ASX:NAB) reports spike in third-quarter profit

• NAB (NAB) reports a 10.3 per cent spike in cash profit for the third quarter of the year
• Cash profit amounted to $1.7 billion, including a write-back of $122 million thanks to improved outlook for housing and business lending
• However, the bank’s performance was largely in line with that of earlier quarters this year
• Still, recent virus outbreaks and resulting lockdowns are creating uncertainties for some customers
• Shares in NAB are up 0.92 per cent to $27.47 as of 10:32 am AEST

After moving funds that had been set aside for COVID-related losses, NAB (NAB) has reported a spike in third-quarter profit.

For the three months ending June 30, Australia’s third-largest lender saw a 10.3 per cent climb in cash profit to $1.7 billion, which included a write-back of $122 million thanks to the improved outlook for housing and business lending.

NAB’s common equity tier 1 (CET1) ratio — a pivotal measure of spare cash — also rose to 12.6 per cent from 12.4 per cent at the end of March.

“In Australia, housing lending rose [two per cent] and SME business lending grew 4.3 [per cent], both outpacing system in recent months,” said chief executive Ross McEwan.

“Our New Zealand business also delivered robust growth with lending up 2.7 [per cent].”

Despite the promising performance, NAB’s results fall largely in line with that of previous quarters — with just a one per cent increase in profit compared to the average over the prior six months.

Mr McEwan also warned that recent virus outbreaks and the resulting lockdowns were creating uncertainties for some customers, but said he remained optimistic about the long-term outlook for Australia and New Zealand.

“The strong economic growth leading into this period, ongoing government support and customers’ relatively healthy starting positions give us confidence that once restrictions are eased, the economy will again bounce back,” he continued.

Shares in NAB were up 0.92 per cent to $27.47 as of 10:32 am AEST.