NAB share price drops after first-half cash profit rises 7%
National Australia Bank (NAB) posted a 75% rise in its first-half cash profit to A$2.95 billion on Thursday.
NAB Share price
National Australia Bank Ltd share price dropped up to 1.2% to $25.60 at time of writing. Straight after the new it dropped to a low of $25.45.
NAB H1 Key figures
NAB cut its interim dividend to 83 Australian cents per share. NAB had long maintained a dividend of 99 Australian cents per share for every six months since 2014.
The cut reduces the company’s relatively high payout ratio.
Cash earnings came in at A$2.95 billion ($2.07 billion) for the six months ending March 31, compared with A$2.76 billion a year earlier, meeting analysts’ expectations.
NAB’s net interest margin - a key measure of bank profitability - fell 7 basis points to 1.79%.
Revenues were up 1.4 % with growth in housing and business lending partially offset by lower margins.
Costs rose 1.7 %
Banking royal commission
In the wake of the royal banking commission, analysts predicted weaker results from the big four Australian banks.
The big four banks have paid back an estimated $4.1 billion so far, with some analysts speculating an even higher number of around $5 billion in pay backs.
It comes after a difficult year for Australia’s big four banks including the ANZ, Westpac and the Commonwealth bank.
‘This has been a challenging period for NAB with the Royal Commission highlighting the need for us to take greater action to earn back the trust of our customers,’ says Philip Chronican, NAB's interim CEO and chairman-elect
Impairment charges rose by more than 20% to $449 million. Nab was also hit by a post-tax $525 million cost for customer remediation, after the banking royal commission.
NAB said it would announced additional costs soon.
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