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NAB profit adds to bank sector's boom year but threats remain

Business

The NAB has reported a 94 per cent increase in cash earnings of $3.3 billion for its first half-year.

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The result adds to impressive profits from ANZ and Westpac recently.

Shareholders will earn a 60 cents a share dividend from the result as the bank reported growing confidence in its outlook.

However, chief executive Ross McEwan warned that risks remained.

“The recovery is not even and some customers, such as those in international travel and hospitality, particularly in CBD areas, face significant challenges,” McEwan said.

He said how those people fared would be determined by how the economy dealt with the end of JobKeeper, the timing of the vaccine rollout and the reopening of Australia’s borders.

He said the first half result reflected improving conditions and a better-than-expected outcome from credit impairments.

“Against this improving economic backdrop there is growing momentum across our bank reflecting investment in key strategic priority areas,” he said.

A major factor in the result was the write-back of $128 million relating to expected credit impairments stemming from the pandemic.

The bank said Australia’s recovery was at a “brisk pace” and should be well placed to deal with the end of JobKeeper.

However, it said there was a lot of spare capacity in the labour market and wages growth would remain weak.

 

 

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