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- NAB (NAB) shares are tumbling on Thursday despite the big bank reporting a “strong” financial performance for the first half of 2023
- The bank posted a 17 per cent increase in half-yearly profits to just shy of $4.1 billion over the half-year, though this was below market predictions
- The company attributes the growth to rising interest rates and a strong performance in its business banking unit
- NAB has declared an interim dividend of 83 cents per share — a rise on the 73 cents per share offered this time last year
- Shares in NAB are down more than 5.5 per cent and trading at $26.98 at 12:57 pm AEST
National Australia Bank (NAB) shares tumbled on Thursday despite the big bank reporting a “strong” financial performance for the first half of 2023.
The bank grew its half-yearly profit by 17 per cent compared to the same time period last year to $4.1 billion. At a statutory level, net profits grew 11.7 per cent year-on-year to just under $4 billion.
NAB attributed the gains to rising interest rates and a strong performance in its business banking unit.
The ASX 200-lister’s business and private banking division was boosted by strong underlying profit growth through volume growth and increased margins.
NAB Chief Executive Ross McEwan said results stemmed from the execution of its strategy over a number of years.
“This includes consistent investment in long-term growth opportunities while making choices for more targeted growth against the backdrop of a slowing economy and increasing competition,” he said.
“The higher interest rate environment has also been an important near-term driver of
revenue this period.”
However, the big bank’s net interest margin sat at 1.77 per cent in March — slightly lower than its December peak of 1.79 per cent.
Nevertheless, NAB welcomed signs that inflation appears to have peaked, with the nation’s cash rate also potentially having reached its peak.
“While there is still uncertainty over the extent to which higher interest and living costs will impact consumer spending, it now seems increasingly likely that Australia will avoid a pronounced economic correction,” NAB said in a statement.
NAB also reported its total loans were up 6.2 per cent and deposits up 8.4 per cent for the half-year, benefiting from the acquisition of Citigroup’s Australian consumer business in June 2022.
Elsewhere, NAB became the first to follow RBA’s May decision, lifting its standard variable home loan interest rates by 0.25 per cent per annum. The company also lifted its Reward Saver bonus interest rate by 0.25 per cent to 4.5 per cent per annum and its NAB iSaver introductory and standard variable rates by 0.25 per cent p.a. to 4.5 per cent p.a. and 1.85 per cent p.a. respectively.
NAB declared an interim dividend of 83 cents per share on Thursday, up compared to the 73 cents offered a year earlier.
Shares in NAB were down more than 5.5 per cent and trading at $26.98 at 12:57 pm AEST.
