National Australia Bank’s third-quarter cash profit rises, announces A$1.5 billion buyback

NATIONAL Australia Bank (NAB) on Tuesday (Aug 15) reported an increase in its third-quarter cash profit, helped by rising interest rates, and announced a A$1.5 billion (S$1.32 million) share buyback.

The buyback, which the bank aims to commence in late-August, will result in the reduction of the common equity tier 1 ratio – a measure of banks’ financial strength – by 35 basis points at level 2.

Australian banks have benefited in the high interest rate environment as they charged more from borrowers, but now face headwinds from rising bad debt and increasing competition for mortgages.

“We know this environment is challenging for our customers, but pleasingly, most are proving resilient with only a modest deterioration in asset quality in Q323,” said chief executive Ross McEwan.

The country’s second-biggest lender posted cash earnings of A$1.90 billion for the quarter ended June 30, compared with A$1.80 billion a year earlier.

Analysts had expected A$1.83 billion, according to Visible Alpha consensus.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

NAB’s net interest margin, a key measure of profitability, in the April-June quarter was lower at 1.72 per cent than the first-half’s quarterly average. REUTERS