National Australia Bank (NAB) shares reached a record high on Wednesday after the company reported a 16% increase in first-quarter cash earnings. The surge was fuelled by robust performance across its business and home lending divisions. Shares of the top business lender climbed as much as 5.8% to an all-time high of A$47.96, marking its best trading session since April of last year.
NAB posted cash earnings of A$2.02 billion for the quarter ending December 31, up from A$1.74 billion a year prior. The bank’s business banking segment, its largest, experienced a 7% increase in quarterly volumes, while the Business & Private Banking segment grew by 3%. Housing loan volumes also saw a 5% rise, with Australian home lending growth outpacing the broader market, excluding runoffs from its Advantedge unit. National Australia Bank provides financial services to individuals and businesses. It offers a range of products, including banking, wealth management, and insurance services.
The bank’s net interest margin, a key indicator of lending profitability, increased by 2 basis points to 1.80%. However, its common equity tier 1 (CET1) ratio, which measures spare cash, decreased to 11.48% in the first quarter from 11.6% the previous year. According to Citi analysts, the results were very strong, underpinned by a great quarter in Markets & Treasury and better asset quality. However, they noted that the CET1 ratio was a clear negative and weaker than previous figures.
CEO Andrew Irvine stated that NAB is well-positioned to manage the bank for the long term, support customers, and deliver sustainable growth and returns for shareholders. NAB’s earnings report concludes the February reporting season for the “Big Four” banks, following positive results from Commonwealth Bank of Australia (CBA), Westpac Banking Corp (WBC), and ANZ Group.
