(Bloomberg) -- National Australia Bank Ltd.'s full-year profit beat forecasts as the lender continued to ride the wave of a stronger-than-expected recovery in the nation's economy.
Cash earnings climbed to A$6.56 billion ($4.87 billion) in the year ended Sept. 30, compared with A$3.71 billion a year earlier, according to a statement Tuesday. That beat the A$6.45 billion mean estimate of 13 analysts surveyed by Bloomberg. The country's biggest business bank will pay a final dividend of 67 Australian cents per share.
“Our bank has momentum, our strategy is clear and as lockdown restrictions ease, a pick-up in activity is expected,” National Australia Chief Executive Officer Ross McEwan said in the statement. There were “some uncertainties” in the outlook, but the bank is well positioned for the expected economic rebound in Australia and New Zealand, he said.
The Melbourne-based lender's result caps a year that's seen a strong rebound from the pandemic for Australian banks, shareholders rewarded with buybacks and a buoyant housing market supporting mortgage demand.
Tuesday's result leaves National Australia well placed for further buybacks with A$5.2 billion of surplus capital, according to Bloomberg Intelligence senior industry analyst Matt Ingram. The shares reversed early gains at the start of Sydney trading Tuesday, slipping 0.8% as of 10:22 a.m.
The bank further cemented its position as the largest lender to small to medium businesses, with lending growing 7%, beating the average expansion within that market. National Australia also wound back provisions by A$217 million.
Goldman Sachs Group Inc. analysts said the result was supportive of the firm's “buy” recommendation on the shares, and National Australia remains the preferred exposure to the Australian banks.
Other Key Details
- Common equity tier 1 ratio of 13%, up from 11.5%
- Capped oil and gas exposure at $2.4 billion and will reduce exposure from 2026 through to 2050
- The markets and treasury unit was a poor performer, with income falling 24% due to lower foreign exchange sales, low interest rates and tough trading conditions
What Bloomberg Intelligence Says
NAB's A$6.6 billion adjusted cash profit could be tough to beat in 2022. Net interest margin could remain pressured.
-- Matt Ingram, senior industry analyst. Read report here.
Get More
- For more details on the results, click here.
- For more on National Australia's climate risk management, click here.
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