This despite a 5% decline in earnings
NAB has delivered a sound third quarter result, following very strong first-half results, thanks to a consistent and disciplined execution of the bank’s strategy against a backdrop of higher interest rates, slowing growth, inflationary pressures, and increased competition, according to the bank’s head honcho.
NAB reported a 5% decline in cash earnings before tax and credit impairment charges for the third quarter. This was driven by a 2% decline in revenue reflecting lower margins, broadly flat gross loans and acceptances, and a 5% decline in net interest margin to 1.72, and a 3% rise in expenses.
“Growing our SME franchise remains a priority and over the June quarter SME business lending rose 4%,” NAB CEO Ross McEwan said. “During the same period, we chose to maintain our disciplined approach in the competitive Australian home lending market with below system growth of 1%.
“Our strategy is also delivering productivity, which is key to helping us manage inflationary impacts while still investing in our key priorities. We continue to target productivity savings of approximately $400m in FY23.”
McEwan said that despite a challenging environment for its customers, most are proving resilient with only a modest deterioration in asset quality in 3Q23.
“Consistent with our strategy, we are focused on keeping our customers and our bank safe and maintaining prudent risk and balance sheet settings,” he said. “Capital levels remain healthy even after allowing for our latest on-market share buy-back announced [Aug. 15]. Liquidity and collective provision coverage are strong, and we raised $37bn of term funding by end July.
“We will continue to execute our long-term strategy with discipline and improve customer and colleague outcomes to deliver sustainable growth and improved shareholder returns.”
The NAB announcement can be found here.
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