NAB has reported unaudited cash earnings of $1.75 billion for the third quarter of the 2024 financial year.
In a statement to the ASX on Friday, it said cash earnings were down 0.2 per cent compared to the 1H24 quarterly average, while statutory net profit came in at $1.9 billion.
The bank explained revenue declined 1 per cent in the three months to 30 June 2024, though excluding markets and treasury income, this figure rose 1 per cent, reflecting volume growth and higher other operating income, including lending fees.
Net interest margin (NIM) was “stable”, it said, with small reductions from lending competition and deposit mix, offset by benefits of a higher interest rate environment.
Expenses also rose 1 per cent, mainly reflecting higher salary-related costs, partly offset by productivity benefits.
However, NAB also highlighted its focus on future productivity savings, setting a target of approximately $400 million in FY2023–24, with the expectation that cost growth in FY23–24 will be lower than in FY22–23.
CEO Andrew Irvine said that while NAB’s strategy has served the bank well in recent years, its strategic priorities will focus more on delivering better customer service and simplifying operations.
“Our result reflects a more stable operating environment and benefits,” he said.
“Our strategy has served us well over recent years. As we build on this progress, our strategic priorities will evolve including an increased focus on delivering better service to customers and removing complexity across NAB.”
Irvine acknowledged the economic environment, including persistent inflationary pressure, remains “challenging” for customers.
“While most customers are proving resilient, not unexpectedly we have seen asset quality deteriorate further in 3Q24. It is essential we keep our customers and our bank safe,” he said.
The bank’s credit impairment charge came in at $118 million, primarily reflecting a further deterioration in asset quality across the group.
The ratio of non-performing exposures to gross loans and acceptances increased by 11 bps from March 2024 to 1.31 per cent, reflecting mainly continued broad-based deterioration in the business and private banking business lending portfolio, combined with higher arrears for the Australian mortgage portfolio.
It added the ratio of gross impaired assets to gross loans and acceptances remained flat at 0.15 per cent.
In June, Oxfam accused NAB of pocketing $1.1 billion in “crisis profits” in 2022, and $1.6 billion in 2023.
“Australia’s second largest lender, National Australia Bank, has been able to ride the wave of the Reserve Bank’s 13 interest rate rises since May 2022, to enlarge its profit margins alongside its big four peers, while many people struggled with their increasing mortgage repayments,” the report alleged.
The organisation also accused Australia’s top 500 corporations of making $98 billion in crisis profits since the start of the decade and called for a “crisis profits tax” to be implemented to discourage price gouging.
