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NAB share price: 3 things to watch out for in half year results

National Australia Bank (NAB) is set to report its half year earnings this week, making it the second of the “Big Four” Australian banks to report its earnings.

1: Will the NAB produce a strong half-year profit?

In the after math of Australia’s royal commission into the big banks, analysts are forecasting the NAB’s half year earnings to decline from prior periods.

Analysts agree that NAB could be forced to cut its interim dividend, to meet APRA’s ratio benchmark by year end.

A cut from 99 cents per share to 90 cents per share has been pencilled in by some analysts, while other expect the bank to reduce its interim dividend to 89 cents per share.

Analysts at Goldman Sachs forecast NAB’s cash earnings growth of 9.1% on the prior period to $3,009 million. Sachs also believes NAB will reach APRA’s CET1 ratio target of 10.5% by the end of September.

2: NAB’s share price and the banking royal commission

Ahead of its half yearly results on Thursday, The National Australia Bank's share price has fallen 0.8% anticipating the results.

It comes after a difficult year for Australia’s big four banks including the ANZ, Westpac, and Commonwealth bank after a royal commission enquiry into the banks was released in 2018.

The Hayne’s report found the banks were delaying customer compensation payments. The big four banks have paid back an estimated $4.1 billion so far, with some estimates even predicting a higher number of around $5 billion in pay backs.

3: How will NAB’s results compare to other banks?

IG market analyst Kyle Rodda expects the big four banks share prices to have broadly trended with falls in Australian property.

Australian property prices will be closely watched and are expected to tie into the NABs earnings.

Analysts also agree that the royal commission will have its effect on the big four banks earnings, including NAB’s particularly in customer remediation.

NAB will follow on from ANZ's H1 report on Wednesday, with analysts expected similar results.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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