NAB delivers 2.3% growth in half-year earnings

NAB Details
 
Result based on improving momentum: National Australia Bank Ltd (ASX: NAB)has announced its half year of fiscal 2017 results entailing a cash profit before one-off items of $3.29 billion, up 2.3% on the same half in the previous year while a steady fully franked dividend of 99 cents has been declared (to be paid in July 2017). The statutory net profit was of the order of $2.55 billion against the loss of $1.74 billion for the first half of fiscal 2016. This has been at the back of reduced losses from discontinued operations. NAB’s net interest margin has fallen 11 basis points. The consumer bank earnings maintained stability while there was a boost in earnings growth from the corporate and institutional bank (cash earnings surged 18%) driven by increased operating income. There was also a rise in customer deposits by 6.1% over prior corresponding period.
 
Costs and credit quality:However, there has been a rise in costs for the half year by 0.8% owing to higher redundancy and general expenses (technology depreciation costs). Further, total bad debt charge of $394 million has been announced and this is up $19 million on the prior corresponding period and includes an increase in provision overlays of $89 million for potential risks relating to the commercial real estate portfolio. On the other hand, NAB’s Common Equity Tier 1 (CET1) ratio was 10.1% as at 31 March 2017, which is an increase of 34 basis points from September 2016 figure and 42 basis points from prior corresponding year.
 

Half Year Performance (Source: Company Reports)
 
Stock Performance: NAB stock has moved up about 20% in last six months (as at May 03, 2017) and is nearing its 52-week high level. The group has remained muted on future earnings guidance, but the current result looks to be on the positive side. While there are challenges in the operating environment, the bank expects the economic indicators to provide support for better business conditions. We maintain a “Hold” on the stock at the current price of $ 32.91
 

NAB Daily Chart (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.