National Australia Bank lifts full-year profit, dividend

The news: National Australia Bank has lifted its full-year profit and boosted its final dividend, despite a challenging environment in its second half amid rising interest rates and high inflation.

The numbers: Australia's largest business bank reported cash earnings of $7.73 billion for the year to 30 September, up 8.8% from the year before and broadly in line with estimates. Statutory net profit was up 7.6% to $7.4 billion. The lender lifted its final dividend to 84 cents a share, from 74 cents a year ago.

The context: NAB said net interest margins, a core measure of bank profitability, rose 9 basis points to 1.74%, while earnings at its business banking unit jumped 10% to $3.3 billion. However, chief executive Ross McEwan pointed to a more challenging environment over its second half and said NAB is assessing challenges in the mortgage market and slowing loan growth. The lender’s personal banking unit was the only one of its divisions to report lower earnings, down 9.1% from a year ago.

What they said: “We expect further challenges as the economic transition continues, but we remain confident in the outlook. The Australian economy is proving resilient, our balance sheet settings are strong, and we continue to have attractive growth options across our business,” McEwan said.