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.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.