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National Australia Bank Ltd NAB

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Morningstar’s Analysis

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National Australia Bank Has the Foundations in Place to Capitalise on Credit Growth

Nathan Zaia Equity Analyst

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.

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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 and a soon-to-be-divested wealth management business, MLC, round out the group.

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