NAB [ASX:NAB] Stocks slide on third quarter update


Big Four Bank National Bank of Australia [ASX:NAB] released Q3 earnings on Tuesday, with NAB shares falling 3%.

Rising interest rates haven’t benefited NAB much, with NAB up 3% year-to-date.


NAB in Q3 2022

NAB shared its third quarter results for the financial period ending June 30, 2022, reporting $1.85 billion in statutory net income and $1.80 billion in cash revenue.

Cash revenue increased by 6% compared to 3Q21.

NAB noted that cash earnings before tax and credit charges increased 2% from the quarterly average in the first quarter of FY22.

NAB’s Net Interest Margin (NIM) was ‘slightly lower‘ during the quarter.

NAB said that by excluding markets and treasury revenues, NIM was ‘up slightly reflecting the benefit of a rising interest rate environment‘.

In a telling comment, the bank said the rise in interest rates had been somewhat offset by “competition for home loans and rising wholesale funding costs‘.

Expenses increased 1% in the quarter due to growth costs and employee out-of-pocket expenses, offset by productivity.

The bank said it helps customers manage high interest rates, adjust loan repayments and provide support in times of difficulty.

NAB also provided $4.85 million in disaster relief to flood-affected customers based in New South Wales and Queensland and provided €1 billion to fund renewable energy projects.

NAB Outlook

NAB CEO Ross McEwan commented on the bank’s latest quarter:

As the economy evolves, persistently low unemployment and healthy household and business balance sheets are helping to cushion the effects of higher inflation and higher interest rates…

Our business is also in good shape for this changing environment. Balance sheet metrics remain strong and we are well advanced in our FY22 wholesale term funding task with $34 billion raised at the end of June.

Investments to deliver simpler, more digital experiences for customers and colleagues are supporting balanced growth and productivity gains that are expected to exceed $400 million in FY22.

We have a clear strategy and executing it with discipline is our top priority.’

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