NAB shares lift on first-half earnings, buyback increase
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More news: NAB shares lifted on the ASX at market open after the banking group reported a statutory net profit rise for the first half, and unveiled a $1.5 billion increase to its on-market buyback.
Shares were up 1.2% to $34.20 by 11am AEST.
What they said: Jarden analysts said NAB's headline result was a "slight miss", with its cash profit of $3.55 billion in line with consensus but 2% below Jarden's estimates, largely due to lower-than-expected markets income. However, the bank's net interest margin (NIM) was three basis points ahead of consensus expectations at 1.72% and its interim dividend of 84 cents beat consensus by 1 cent.
E&P Capital analysts noted that NAB's cash earnings and pre-provision profit failed to meet their estimates, and consensus cost growth of 2% and 2.4% over the next two years was "too optimistic". However, they said there was potential for a FY24 NIM of 168 basis points to be upgraded to around 172 basis points, given that the first-half NIM result came in better than expected. They also saw potential for a decrease in the consensus credit impairment charge for the current financial year.
NAB posts profit lift, hikes buyback by $1.5b
The news: National Australia Bank reported a first-half statutory net profit of $3.49 billion, and unveiled a $1.5 billion increase to its on-market buyback.
The numbers: NAB posted statutory net profit of $3.49 billion for the six months to March, up 1.4% on the prior corresponding period.
However, the bank said revenue decreased 3.7% as the benefits of a higher interest rate environment were "more than offset" by competition.
Cash earnings of $3.55 billion were also 12.8% lower year on year.
NAB declared an interim dividend of 84 cents per share, level with last year's handout.
The bank also said it would lift its ongoing market on market share buyback by $1.5 billion.
The context: NAB CEO Andrew Irvine said that the bank operated in a "challenging environment" during the six-month period, as slowing economic growth and competitive pressures hit earnings".
NAB said the increase to its buyback, which commenced in August 2023 and completed $1.3 billion as of 31 March, is expected to be undertaken over the next 12 months with the aim of managing its Common Equity Tier 1 radio towards its target range of 11%-11.5%.
The sources: ASX announcement, ASX announcement
