Australia’s NAB signals slowing loan growth as rates rise, stocks fall

  • Cash profit for the year A$7.10 billion, up 8.3%
  • Total annual dividend of AU$1.51/share
  • Rise of the house, business loans increase income
  • Shares down 2.7%

Nov 9 (Reuters) – National Australia Bank (NAB) (NAB.AX) warned on Wednesday that rising interest rates could impact demand for credit in the current financial year, a further decline real estate prices threatening its financial situation.

The country’s second-largest lender also warned that the economic uncertainty created by rising interest rates due to soaring inflation could challenge some customers, but said it expects conditions to be met. strong jobs and substantial savings for homes and businesses, which will help it withstand the impact.

NAB forecasts sharp decline in corporate and housing loan volumes in FY2023 in Australia, with corporate credit growth expected to slow to 3.6% from 14.7% in FY2022 .

He also joined smaller rivals Westpac Banking Corp (WBC.AX) and Australia and New Zealand Banking Group (ANZ.AX) in warning of rising wage costs due to high inflation in fiscal 2023.

Shares of the Melbourne-based bank fell 2.7% to their lowest level since October 18.

NAB, the nation’s largest business lender, saw strong growth in its business and home loans in the year ended September as windfall profits from rising interest rates boosted revenue. cash at 7.10 billion Australian dollars ($4.62 billion).

That compares with A$6.56 billion reported a year earlier and analysts’ estimate of A$7.08 billion, according to Refinitiv Eikon.

“This result reflects the continued execution of our strategy, including targeted volume growth and a disciplined approach to cost management while investing for growth,” said Chief Executive Ross McEwan.

The bank’s troubled loans, whose interest payments were delayed for more than 90 days, fell to 0.66% in fiscal 2022 – the lowest level since fiscal 2015 – against 0.94% in 2021.

Net interest margin, a key indicator of profitability, increased 1 basis point to 1.65% on an adjusted basis. It declared a final dividend of 78 Australian cents per share, bringing the total dividend to 151 cents each, a jump of 19% from a year ago.

($1 = 1.5380 Australian dollars)

Reporting by Sameer Manekar and Harish Sridharan in Bengaluru; Editing by Shailesh Kuber and Rashmi Aich

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