National Australia Bank (NAB) experienced a slight miss in its second-half results, according to Morgans research analyst Nathan Lead. The bank’s cash earnings fell approximately 2 per cent short of consensus expectations and Morgans’ own forecasts. NAB focuses on providing financial services to individuals and businesses. The company offers a range of products, including banking, wealth management, and insurance.
Cash earnings per share decreased by about 2 per cent compared to the first half, primarily due to increased credit impairment charges and higher non-performing exposures. This offset the largely flat pre-provision operating profit. Lead highlighted that non-performing exposures had risen by 7 per cent, with net write-offs also increasing, contributing to the earnings shortfall.
While the net interest margin saw an increase of 8 basis points, the quality of this gain was limited, driven by a lower contribution from liquid assets and more volatile income from Markets & Treasury. NAB is reportedly focused on improving return on equity (ROE) by expanding its business banking operations, growing deposits, and strengthening its proprietary home lending.
Negative jaws, however, remain a concern, with revenue growth of 2.7 per cent being outpaced by a 5 per cent increase in costs. Additionally, a 39 per cent rise in credit impairments suggests potential earnings pressure into the 2026 financial year. Following the announcement, shares in NAB experienced a decline of 2.3 per cent in morning trading.
