NAB (ASX:NAB) lifts 1H revenue, dividend; how are shares faring?

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Highlights

  • NAB reported robust cash earnings and dividend growth during the six months ending 31 March 2022.

  • The bank reported strong growth in lending and deposits.

  • The bank said it remained well capitalised despite AU$5 billion in share buybacks announced over the past year.


National Australia Bank Ltd (ASX:NAB) on Thursday announced robust cash earnings and dividend growth during the six months ending 31 March 2022. The banking giant reported a 4.6% increase in revenue to AU$9.07 billion during the given half, with cash earnings up 4.1% to AU$3.4 billion.

One of the ‘Big 4’ Australian banks, NAB delivered AU$3.6 billion in statutory net profit, the lender said in its latest ASX filing. The bank also said that it remained well capitalised despite AU$5 billion in share buybacks announced over the past year.

By 10:10 AM (AEST), the stock was trading at AU$32.55, up 0.34%. The stock is up nearly 11% so far this year.

Net Interest Margin (NIM) takes a hit

The bank reported strong growth in lending and deposits which were up 10% and 12%, respectively, compared to the corresponding period last year. However, NAB’s net interest margin (NIM) was down 11 basis points to 1.63%. The bank’s common equity tier 1 (CET1) ratio stood at 12.48%, 52 basis points lower than in September 2020.

Dividend Boost

NAB’s board announced an interim dividend of 73 cents per share, fully franked, up nearly 22% from the prior period, with an ex-dividend date of 11 May 2022 and a payment date of 5 July 2022.

NAB said that its capital levels remained above its targets despite completing a AU$2.5 billion buyback, with a further AU$2.5 billion buyback starting in May 2022. The bank said that its FY22 term funding was also well advanced.

  • Business & Private Banking segment reported a 17.5% rise in cash earnings to AU$1.43 billion.
  • Corporate & Institutional Banking segment reported a 3.1% surge in cash earnings to AU$806 million.
  • In New Zealand, NAB delivered an 8.4% rise in cash earnings to NZ$668 million.
  • Personal Banking segment reported an 8.3% dip in cash earnings to AU$788 million.

What does NAB’s management say?

NAB CEO Ross McEwan was upbeat about the bank’s performance during the first half.

 “Our results this period were achieved while maintaining strong balance sheet settings. This is key to delivering sustainable growth and keeping the bank safe. Our capital levels remain above our targets despite completing a $2.5 billion buyback, with a further $2.5 billion buy-back commencing in May 2022. Our FY22 term funding is also well advanced,” he said.

“The lift in our 2022 interim dividend reflects progress of our strategy, confidence in the sustainability of our performance and our continued optimism in the medium-term outlook for the Australian and New Zealand economies,” he added.

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