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NAB reports cash earnings drop amid growing arrears

By Rhea Nath
3 minute read

The big four bank has announced cash earnings for the first quarter of FY24 are 16.9 per cent lower than in the prior corresponding period, with Australians feeling the brunt of loan repayments.

NAB has announced cash earnings of $1.8 billion in its latest quarterly results, down from the $2.15 billion reported in the first quarter of 2023.

In an ASX announcement on Wednesday, the bank said this marked a 16.9 per cent decline, though cash earnings before tax and credit impairment charges were “broadly stable” compared with the second half of FY2023 quarterly average.

NAB’s unaudited statutory net profit stood at $1.7 billion, compared to $2.05 billion in the prior corresponding period.


Revenue increased 1 per cent and NAB said net interest margin was slightly higher. Though it did not offer specifics, it explained the margin declined modestly with higher deposit costs and competitive lending pressures, mostly relating to Australian home lending, partly offset by higher earnings on capital.

NAB Group chief executive officer Ross McEwan described the 1Q24 performance as “sound” with “good, targeted momentum” across the bank.

“1Q24 cash earnings declined 3 per cent compared with the 2H23 quarterly average but were broadly stable excluding the impact of a higher effective tax rate of 30 per cent. This reflects a continued disciplined approach to growth during what remained a highly competitive period, combined with a focus on productivity to help offset cost pressures,” he said.

The bank saw credit impairments of $193 million, which reflected “higher arrears in Australian home lending combined with business lending volume growth.”

However, it believed specific charges remain at low levels.

Compared to the previous quarter, the ratio of 90-plus days past due and gross impaired assets to gross loans and acceptances was stable at 0.75 per cent, with increase in arrears in the Australian home loan portfolio offset by improved performance in the New Zealand business lending portfolio, NAB explained.

According to Mr McEwan, the majority of the bank’s customers are “faring well” amid a resilient economy.

“We continue to be optimistic about the outlook and the bank is in good shape,” he said, ahead of handing over the reins to Andrew Irvine in April.

“Improving customer and colleague outcomes remains our key focus to deliver sustainable growth and improved shareholder returns.”