Analyst Note| Nathan Zaia |
National Australia Bank’s first-half fiscal 2021 cash profit of AUD 3.3 billion jumped 48% on second-half fiscal 2020, and was pleasingly void of large nonrecurring costs for the first time in a long time. The turnaround attributable to AUD 128 million in loan impairment provisions written back this half, compared to a AUD 1.6 billion expense in the previous half. Mediocre loan growth and modest expense growth were as expected, with full-year cost growth guidance of 0-2% reaffirmed. Home loan growth has returned closer to system after service levels in the broker channel were rectified and lending restrictions put in place during COVID were eased. The bank noted a growing business lending pipeline with momentum building in March and April. The firm has added 490 new bankers. While weighing on business lending profits now, it leaves them well placed as activity lifts.