NAB shares drop as full-year earnings miss estimates
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More news: NAB shares tumbled in morning trade after posting lower cash earnings for the 2025 financial year.
Shares were down 2.7% to $43.32 at 11:50am AEDT. The slide helped take the finance sectoral index into negative territory, with all other sectors in the green.
NAB defends business bank amid 'fierce' competition
More news: Chief executive Andrew Irvine says he is happy with the way NAB's business bank – Australia's largest – has improved its market share against aggressive rivals like Westpac and CBA, with business lending growing by 9% in FY25. Earnings from its business and private banking division grew 1.6% to $3.33 billion.
What they said: “I'm particularly pleased that we were able to increase market share and actually improve margins in our leading business banking franchise. That's something people are going to be looking at, investors are looking at, and we delivered in the half," Irvine told a media call on Thursday.
“Competition is fierce, and it's fierce because it's the best part of the banking market to be playing in. Consumer returns have been soft for a while now...and so everyone wants what we have. But we've shown in the last year, and particularly the last six months, that we can both defend and extend our position and not give away margin at the same time."
The context: After reporting its full-year results on Thursday, NAB shares fell around 1% in early trade.
NAB full-year cash profit edges lower to $7.1b
The news: National Australia Bank has posted a full-year net profit of $6.759 billion, down 2.9% year on year as credit impairment charges increased in the period.
The numbers: NAB's cash earnings of $7.091 billion, down 0.2% year on year, came in marginally lower than the Visible Alpha consensus figure of $7.168 billion. The bank's net interest margin increased by 3 basis points from 1.71% to 1.74%.
Statutory earnings per share were down 3.6% year on year to 221 cents, behind consensus expectations of 233.9 cents, with a full-year dividend of $1.70 per share, level with estimates.
NAB's common equity tier 1 ratio was 11.70%, below consensus of 11.84%.
Expenses grew by 4.6% with the bank recording a $130 million charge owing to the review and remediation of long-running payroll issues.
The context: NAB's chief executive Andrew Irvine said the bank's 1% uptick in underlying profit was a sign of "good momentum", particularly over the second-half period.
Irvine noted an increase in credit impairment charges over the year, but said a number of key asset quality outcomes improved over the six months to 30 September, "consistent with a supportive Australian economic environment".
What they said: "We are making good progress on our key priorities of growing business banking, driving deposit growth and strengthening propriety home lending," said Irvine.
"This has been supported by targeted investments in front line bankers and technology-enabled solutions delivering simpler, faster and safer outcomes."
The source: ASX
