Australia’s third-largest lender said cash earnings for the year to September 30 rose 76.8 per cent from a year ago to $6.56 billion.

The result was slightly ahead of analyst’s expectations.

Statutory net profit also soared, allowing the bank to more than double the final dividend it paid out last year to 67 cents per share.

“Our results this year demonstrate we have negotiated a challenging environment … resulting in safe growth across our business,” CEO Ross McEwan said on Tuesday.

“Our bank has momentum, our strategy is clear and as lockdown restrictions ease, a pick-up in activity is expected.”

NAB managed to lift gross loans and advances by 5.9 per cent largely on the back of stronger home lending, which was up 5.3 per cent.

Performance at its key business banking division was steady, with earnings up 0.3 per cent, while personal banking income was up 14.4 per cent and NZ banking enjoyed an 18.7 per cent rise.

NAB also wrote back provisions worth $217 million as COVID-19 related loan losses were lower than expected.

On the negative side, earnings at its institutional banking unit slid 14.8 per cent, while net interest margin – the difference between what banks charge versus the cost of a loan – fell 6 basis points to 1.71 per cent.

Annual revenue was down 2.2 per cent.

NAB shares were down 2.8 per cent to $28.28 by 10.35 AEDT.

NAB says it is optimistic about the future beyond the coronavirus pandemic but says economic recovery will be postponed until 2022.

It expects a 3.8 per cent hit to the economy in the September quarter, but is forecasting gross domestic product will then rebound by 4 per cent in 2022, reflecting healthy household balance sheets, ongoing policy support and improved business confidence.

“Our bank has momentum, our strategy is clear and as lockdown restrictions ease, a pick-up in activity is expected,” McEwan said.

“While some uncertainties exist in the outlook including the impact of tapering support, our balance sheet settings are strong and we are well positioned for the expected economic rebound.”

NAB’s final dividend took full year payout to $1.27 a share and follows a difficult year when profits slumped amid the pandemic and dividends were capped by regulators.

NAB FY PROFIT REBOUNDS

* Cash earnings up 77 per cent to $6.56 billion

* Net profit $6.36 billion vs $2.56 billion

* Operating revenue down 2.2 per cent to $16.81 billion

* Fully franked interim dividend 67 cps vs 30 cents a year ago.