NAB Kicks Of Bank Earnings Season

Australian banking major, National Australia Bank has posted a 22 per cent rise in its third quarter cash profits, which rose to $1.1 billion, as bad debt charges fell.

“In the June quarter NAB delivered solid, sustainable business results, improved customer satisfaction and remained financially strong during what was a period of continued uncertainty in global financial markets,” chief executive Cameron Clyne said in a statement.

NAB’s results which are the first of the big four, will be closely followed by analysts and investors who are seeking clues on the performance of the rest of its rivals.

CBA reports its annual results tomorrow, whilst Westpac and ANZ will be providing trading updates in the following weeks.

Mr Clyne said: “The combination of strong capital and sound funding positions gives us the flexibility and capacity to grow in line with our strategic agenda.”

NAB said that whilst it experience lending growth in its personal and business banking units, which produced revenue momentum, total revenue was still marginally below its average first half quarterly, which was in large part due to accounting volatility arising from increased credit spreads.

NAB is the more leveraged than its big four rivals to business demand, and the bank says that lending volumes during the June quarter in its business banking division had improved.

“Business banking is well placed to benefit from a recovery in business credit growth,” Clyne said.

NAB cautioned that funding costs remain an issue, however Net interest margin over the quarter were stable.

Charges for bad and doubtful debts were approximately $510 million during the quarter, compared with $1.06 billion during the same time period a year earlier. Its tier one capital ratio stood at 8.79 per cent at the end of June, down from 9.09 per cent at the end of March.

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