The National Australia Bank has released a cracking result this morning with a big increase of $1.4 billion or 33% to $5.45 billion over the previous 12 months to September.
Revenue was up 2% on a cash basis coming from housing and other personal lending while operating expenses increased 4.4%. The charge for bad and doubtful debts fell $693 million as the economy here in Australia and in the UK has improved.
It looks like a very good result for the NAB, with return on equity up to 14.5%. That’s very solid when you take into account the overall economic state and returns on offer either at the Bank or elsewhere in the economy – the shareholders of the NAB will be pleased with this and the 97 cent final dividend.
Indeed, the NAB’s results show that ex-the dividend payment, cash earnings would have added 0.86% to the the CET1 ratio, which might be why APRA wrote to the banks recently.
Other areas of interest in the NAB’s results are that the NAB increased its lending on housing in Australia by $12.5 billion but lending to business decreased by $7.2 billion once FX changes were adjusted for.
Interestingly, the strength of the NAB’s Ubank brand, or at least the rates it pays, was a big driver of the NAB’s $8.2 billion increase in deposits from personal accounts (non-banking).
Overall another very solid performance from one of Australia’s Big Four.