NAB Shares Fall Despite Record First-Half Earnings

By Alice Uribe

SYDNEY--Shares in National Australia Bank fell sharply on Thursday after analysts flagged potential weaker net interest margin growth, despite it also delivering record-breaking first-half results.

The stock was down 7.7% at 26.34 Australian dollars (US$17.57), after hitting a low of A$26.22 earlier. The fund manager is currently the worst performer on Australia's S&P/ASX 200.

Australia's second-largest lender by market capitalization on Thursday said its net profit rose to A$3.97 billion in the six months through March, up from A$3.55 billion a year prior. But this was still below analysts' expectations. According to a FactSet-derived consensus estimate, market watchers had expected an interim net profit of A$4.10 billion.

While NAB's half-year net interest margin--the difference between the interest income generated and the amount of interest paid out to lenders--rose 14 basis points to 1.77%, some analysts think that the lender's margins are unlikely to keep expanding in the future.

UBS analyst John Storey said in a note issued after NAB released its results that the NIM was weaker than expected, calling out the fact that it was only up 10 basis points half on half.

Shares in NAB are down 12% in 2023 so far.

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

(END) Dow Jones Newswires

May 03, 2023 20:59 ET (00:59 GMT)

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