National Australia Bank's 1Q Profit Down on Year

By Alice Uribe

SYDNEY--National Australia Bank reported that profit in its fiscal first quarter was lower than the same time a year earlier, and reaffirmed expense guidance for fiscal 2024.

NAB, one of Australia's major banks, recorded an unaudited net profit of 1.70 billion Australian dollars (US$1.11 billion) in the three months through December. No comparable figure was disclosed, but it compares with an unaudited profit of A$2.05 billion reported by the bank in last year's first quarter.

Unaudited cash earnings, a measure of profit adjusted for fair value and hedging movements and is the basis for calculating dividend payouts, was A$1.80 billion for the quarter.

First-quarter cash earnings were down 3% compared with the average of the prior two quarters, NAB said, but were broadly stable excluding the impact of a higher effective tax rate of 30%.

"This reflects a continued disciplined approach to growth during what remained a highly competitive period, combined with a focus on productivity to help offset cost pressures," said NAB Chief Executive Ross McEwan.

The bank said first-quarter revenue grew by 1% when compared with the average of the prior two quarters.

NAB's net interest margin, a measure of the difference between what a bank pays to get customer deposits and funds, was slightly higher than the average of the prior two quarters.

Australian banks benefited amid interest rate hikes, but intense competition on home loans and customer deposits has weighed on margins, offsetting some of the gains.

For fiscal 2024, NAB said it continued to target productivity savings of approximately A$400 million and for expense growth to be lower than fiscal 2023 growth of 5.6%.

Write to Alice Uribe at alice.uribe@wsj.com

(END) Dow Jones Newswires

February 20, 2024 16:39 ET (21:39 GMT)

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