NAB profits reach $1.8 bn
National Australia Bank (NAB) has reported a $1.8 billion statutory net profit in the 2021 December quarter on the back of growth in small and medium-sized enterprise (SME) and home lending.
Cash earnings were up 12% compared to the quarterly average of the second half of 2021 while also growing by 9.1% compared to the first quarter of 2021.
In an announcement to the Australian Securities Exchange (ASX), NAB chief executive, Ross McEwan, said asset quality remained benign and momentum had continued across the business despite the environment remaining competitive.
“Volumes have been strong over the quarter with lending and deposits each up $18 billion. In Australia, over the three months to December 2021, home lending grew 2.6% and SME business lending increased 3.4%, and we gained market share across our core lending and deposit products,” McEwan said.
“New Zealand loan growth was also strong at 2.2% over the same period.
“These results reflect an ongoing focus on executing our strategy, making the bank simpler for customers and colleagues. This is evident in our improving customer net promoter scores in consumer and business over 1Q22, which are pleasingly no longer negative.
“There is more work to do but we are moving in the right direction.”
Revenue increased 8% reflecting higher volumes across housing and business lending, increased feres and commissions and a recovery in Markets and Treasury (M&T). Excluding M&T, revenue rose 5%.
Net interest margin (NIM) declined 5 basis points to 1.64% including a modest negative impact from M&T and higher liquids.
Meanwhile, expenses increased 2% mainly reflecting higher salaries and leave costs, combined with investment to support growth, partly offset by productivity benefits.
NAB said it would continue to target broadly flat expenses in the 2022 financial year despite inflationary and growth challenges.
McEwan said: “Disruptions to supply chains and labour markets caused by the recent spread of Omicron present challenges for some of our customers. While this creates uncertainty, we remain optimistic about the outlook for Australia and New Zealand and are well positioned to continue to grow with a strong balance sheet and disciplined execution of a clear strategy.”
AUTHOR
Liam Cormican
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