NAB shares jump on first-half profit
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More news: NAB shares rose in early trading after the bank posted a better-than-expected first-half profit.
Its shares were 3.1% higher at $36.42 and over the last 12 months have risen 6.31%.
NAB said higher markets and treasury income boosted revenue.
NAB beats first-half profit forecasts, but margins under pressure
The news: National Australia Bank has posted a better-than-expected first-half profit on the back of underlying profit growth and lower credit impairment charges but margins narrowed in a competitive market.
The numbers: Australia's largest business bank reported cash earnings of $3.58 billion, up from the $3.55 billion a year ago and ahead of the $3.48% expected by analysts polled by Visible Alpha. Statutory net profit was down 2.5% to $3.41 billion. The lender will pay an in-line interim dividend of 85 cents per share, compared with 84 cents a year ago.
The context: NAB said higher Markets and Treasury income boosted revenue. Net interest margins, a core measure of bank profitability, was stable at 1.70%, but excluding the markets & treasury boost, declined 3 basis points as a result of deposit impacts, higher wholesale funding costs and lending competition. Expenses also increased by 1.4% mainly due to higher personnel and financial crime-related costs, along with increased technology spend.
CEO Andrew Irvine said he is optimistic about the underlying growth outlook for the Australian and New Zealand economies. He pointed to escalating global trade tensions as a key source of uncertainty and said this has prompted the bank to maintain strong balance sheet settings.
