NAB shares jump 4% on ‘record’ quarter
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More news: NAB shares were 4.3% higher in early trading on Wednesday after revealing 16% higher cash earnings.
What they said: UBS analyst Jon Storey said he suspected the strong start to the first half could trigger an earnings upgrade as the market begins revising up expectations for the full financial year.
“NAB’s Q1 26 trading update, which looks like a record quarter for bank, shows performance exceeding UBS estimates and Visible Alpha consensus by approximately 8.5% at the [pre provision operating profit] level and about 10.5% on a cash NPAT basis for [first half of FY26 estimates],” UBS analyst Jon Storey said in a note to clients.
He reiterated NAB was UBS’ preferred pick of the major banks as the investment bank lifted its price target to $47.
Angus Triggs from JPMorgan said the small decline in NAB’s capital position was “no worse than feared” as the bank’s credit quality continued improving.
“The read-across from other bank results had suggested positive trends likely for NAB, and this has been delivered. However, the result puts NAB firmly at the top of peer revenue growth trends in the quarter, and this is likely to drive at least low-single-digit earnings upgrades for consensus, in our view,” Triggs said.
NAB net profit climbs to $2.21b in strong first quarter
The news: National Australia Bank has announced a first quarter net profit of $2.21 billion as the bank reported strong growth across its divisions.
The numbers: NAB’s underlying profit rose 12% to $3.1 billion compared to the second half of FY25 on the back of strong revenue figures, with unaudited cash earnings coming in 15% higher at $2.02 billion.
Over the quarter NAB grew its overall business lending by 2%, with business and private lending up 3%, as the business bank increased total market share. The bank grew its home lending by 1.1x system growth, deposits were up 3% with transaction accounts excluding offsets growing by 6%.
Net interest income rose 3% to $4.6 billion and net operating income jumped 6% to $5.6 billion. Operating expenses remained stable at $2.5 billion, with technology and personnel costs offset by productivity benefits and lower restructuring and remediation costs in the quarter.
The bank’s net interest margin (NIM) rose 2 basis points to 1.80%, and excluding markets and treasury (M&T) and the impact of liquid assets remained stable.
Group common equity tier one ratio fell from 11.7% in the September quarter to 11.48% in the December one, attributed to the payment of the final dividend and a $6 billion increase in risk-weighted assets.
What they said: Chief executive Andrew Irvine said the first quarter reflected a strong start to FY26, driven by a strong economy and contributions from each of NAB’s divisions.
“Delivering simpler, faster outcomes to materially improve customer experiences has supported further productivity benefits this period, allowing us to manage costs while investing,” Irvine said.
“We continue to target productivity savings of more than $450 million for FY26 and for FY26 operating expense growth to be less than FY25 growth of 4.6%.”
The source: ASX
