NAB's first-quarter cash profit slides as arrears grow

The news: National Australia Bank has reported a sharp drop in its first-quarter cash profit on the back of credit impairment charges.

The numbers: Unaudited cash profit for the three months to December fell 16.9% from a year ago to $1.8 billion, largely on account of $193 million in credit impairment charges. Its net interest margin was “slightly higher” compared to the average of the second half of FY23, while expenses were up 2%.

The context: NAB attributed the lift in credit impairment charges to higher arrears in home lending combined with business lending volume growth, but it noted that specific charges were still at low levels. Outgoing chief executive Ross McEwan said the result reflected the bank’s disciplined approach to growth during what remained “a highly competitive period”.

What they said: “While economic growth has slowed, the Australian economy remains resilient and the majority of our customers are faring well. We continue to be optimistic about the outlook and our bank is in good shape as Andrew Irvine transitions to CEO over coming months,” McEwan said.