Strong growth in business lending offsets challenges in the competitive home loan market
National Australia Bank (NAB) announced its full-year financial results, reporting steady cash earnings and strong lending growth in its business banking sector, even as it faced increased competition in the home loan market.
NAB reported cash earnings of $7.1 billion for the year, an 8.1% decline compared to FY23, primarily due to competitive pressures in home lending. Despite this, NAB’s total lending to businesses reached $48 billion in FY24, reflecting its continued focus on supporting Australia’s small and medium enterprises.
NAB chief executive Andrew Irvine (pictured above) emphasised the bank’s commitment to helping Australian businesses thrive, noting that “small businesses are the heartbeat of the Australian economy.” He stated that businesses remain optimistic about growth and investment opportunities, positioning NAB to benefit from their expansion plans.
NAB indicated in its Full Year Result announcement that its Corporate and Institutional Bank, Personal Bank, and its subsidiaries BNZ and UBank also posted solid performances, underscoring what the bank called a balanced approach across its various segments.
The bank’s net interest margin pressures eased in the latter half of the year amid stabilising market conditions. NAB declared a final dividend of 85 cents per share, bringing the total dividend for the year to $1.69 per share. This translates to a total of $5.2 billion in returns to shareholders, with over 40% of NAB’s shareholder base composed of retail investors, including retirees.
Looking ahead, Irvine expressed optimism for the Australian economy, citing low unemployment as a key factor in its resilience. While he acknowledged the ongoing impact of elevated interest rates and cost-of-living pressures, he anticipates inflation will stabilise in 2024, potentially paving the way for interest rate cuts and a recovery in the housing market.
NAB also recently rolled out a refreshed corporate strategy aimed at becoming a more “ustomer-centric organisation. According to Irvine, the bank will focus on simplifying operations, improving response times, and prioritising customer needs, without compromising financial stability or risk management.
“We will continue to help more people achieve their dreams of buying their first home or open up a small business,” Irvine said. “We will help more people hire and grow. Customers must be at the centre of everything we do as a company.”
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