NAB earnings tumble, warns arrears are growing

National Australia Bank’s cash earnings tumbled almost 17 per cent in the December quarter to $1.8 billion, as outgoing chief executive Ross McEwan signalled the national economy remained resilient and the majority of customers were “faring well”.

Releasing a trading update on Wednesday, NAB said its cash earnings were squeezed by $193 million in credit impairment charges as the country’s second-largest bank faced higher arrears. In the first quarter of 2024, 0.75 per cent of customers were three months behind in their repayments – in line with the previous quarter.

“While economic growth has slowed, the Australian economy remains resilient and the majority of our customers are faring well,” McEwan said.

“We continue to be optimistic about the outlook and our bank is in good shape as Andrew Irvine transitions to CEO over coming months.”

NAB said its cash earnings, before tax and credit impairment charges, were “broadly stable” when compared to the second half of the 2023 financial year, down only 3 per cent.

The bank’s revenue increased 1 per cent, net interest margin was “slightly higher” and expenses rose 3 per cent.

McEwan said small-to-medium enterprise business lending grew 2 per cent, while home loan lending rose 1 per cent.

More to come