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National Australia Bank Ltd NAB

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Morningstar’s Analysis

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Taking Some Heat Out of a Surging Mortgage Market Ain't Necessarily a Bad Thing for Australian Banks

Nathan Zaia Equity Analyst

Analyst Note

| Nathan Zaia |

Australian major bank CEOs, the International Monetary Fund, and even the Australian federal treasurer have sounded the alarm about the risks to the financial system due to households taking on more debt. With the Reserve Bank’s cash rate target at 0.1%, it’s never been cheaper to borrow money. With homeowners taking on more debt and sluggish wages growth, the risks to financial stability from an economic shock continue to rise. Hence, we think the Australian Prudential Regulation Authority, or APRA, will introduce macro prudential measures to slow the rise in high debt/income loans in coming months.

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Company Profile

Business Description

National Australia Bank is the most business-focused of the four major banks, holding the largest share of business loans and the number-three spot in home loans. National Australia Bank is currently the third-largest bank by market capitalisation, with the franchise covering consumer, small business, corporate, and institutional sectors. Under the UBank brand the bank also owns one of Australia’s largest digital-only banks. Offshore operations in New Zealand round out the group.

Contact
800 Bourke Street, Level 1, Docklands
Melbourne, VIC, 3008, Australia
T +61 388722461
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings
Fiscal Year End Sep 30, 2021
Stock Type
Employees 35,078