National Australia Bank (NAB) has reported unaudited cash earnings of $1.8 billion (US$1.2 billion) in the first quarter of 2024, down 16.9 percent compared to the prior corresponding quarter.
However, this result beat market expectations, with the NAB share price rising 0.36 percent, closing at $33.61 on the Australian Stock Exchange (ASX). For perspective, Commonwealth Bank of Australia shares shed 1.99 percent on Feb. 21, while Westpac shares fell 0.04 percent.
NAB’s lending balances increased 1 percent during the quarter, including 2 percent growth in small and medium enterprise lending, and a 1 percent boost in Australian home lending.
The bank noted that the cash earnings for quarter one, 2024, only fell 3 percent when compared to the quarterly average in the second half of 2023, remaining stable excluding the impact of a higher tax rate of 30 percent.
This performance was attributed to the bank’s disciplined approach to growth during a competitive period, along with an emphasis on productivity to counteract cost pressures.
NAB CEO Ross McEwan said the bank’s quarter one 2024 financial performance was sound and there is “good momentum” across the bank.
“While economic growth has slowed, the Australian economy remains resilient and the majority of our customers are faring well,” Mr. McEwan said.
“We continue to be optimistic about the outlook and our bank is in good shape as Andrew Irvine transitions to CEO over coming months. Improving customer and colleague outcomes remains our key focus to deliver sustainable growth and improved shareholder returns.”
NAB’s common equity tier 1 ratio, which reflects the bank’s capital against its assets, came out at 12 percent compared with 12.2 percent in September 2023.
Mr. McEwan noted this common equity tier-one ratio remains above the bank’s target range of 11 to 11.5 percent, even after consideration of a market share buy-back.
Compared to the quarterly average in the second half of 2023, cash earnings before tax and credit impairment charges were “broadly stable,” the bank noted.
Other Major Big Four Bank Westpac Reports $1.5 Billion Profit
The news comes after fellow Big Four bank Westpac reported a $1.5 billion profit in the first quarter of 2024, representing a 6 percent decline from the average profit in the second half of 2023.Westpac attributed the drop in unaudited net profit solely to notable items related to hedge accounting, which are expected to reverse over time.
CEO Peter King said it was a solid quarter in which the bank grew the franchise and maintained a strong financial position.
“We remain focused on helping those customers facing high cost-of-living pressures and making difficult choices to manage household budgets.”
CEO Matt Comyn said, “The economy has been fairly resilient, supported by a strong labour market, savings and repayment buffers, population growth, and relatively high commodity prices.”
