National Australia Bank Earnings: Business Credit and Lack of Bad Debts Underpin Solid Result

Largely as expected, National Australia Bank’s first-half fiscal 2024 cash profit eased 3% from second-half fiscal 2023 to AUD 3.5 billion. After being squeezed in second half fiscal 2023, net interest margin firmed 1 basis point to 1.72%. Competitive lending rates and bank customers switching to more costly term deposits and saving accounts weighed on margins, but higher returns on deposit and capital hedges provided an offset. We expect these trends to continue into the second half, with a modest improvement in fiscal 2025 due to more favorable pricing on new loans and deposits.