NAB lifts third quarter profit, announces $1.5bn buyback

The news: National Australia Bank has lifted its third quarter profit despite a slight contraction in margins and announced a fresh share buyback.

The numbers: Unaudited cash profit for the three months to June 30 rose to $1.9 billion, a 5.8% increase from a year ago, while unaudited statutory net profit was $1.75 billion. Its net interest margin declined 5 basis points to 1.72% while expenses increased 3%. NAB will buy back up to $1.5 billion of its shares on-market to manage its common equity tier 1 (CET1) capital ratio.

The context: Like other major banks, NAB has benefited from rising interest rates. The on-market buy-back will reduce the major bank’s CET1 capital ratio by 40 basis points to 11.5%. NAB chief executive Ross McEwan said the bank had delivered “a sound 3Q23 result” with growth in its small business lending book outpacing the growth in home lending.

What they said: "We know this environment is challenging for our customers, but pleasingly, most are proving resilient with only a modest deterioration in asset quality in 3Q23. Consistent with our strategy, we are focused on keeping our customers and our bank safe and maintaining prudent risk and balance sheet settings". - CEO Ross McEwan.