As Westpac Banking Corp (ASX: WBC) released its full-year results with robust profit and dividend growth, shareholders of National Australia Bank Ltd (ASX: NAB) are likely anticipating the bank's performance in its upcoming FY 2023 earnings report, scheduled for later this week. To gauge the market's expectations for this major financial institution, let's delve into a preview of NAB's results.
NAB Results Preview
In the context of the broader ASX financial stocks, according to analysts at Goldman Sachs, NAB is expected to report cash earnings (before one-offs) of $7,896 million, representing an 11% increase compared to the prior corresponding period. This forecast slightly exceeds the consensus estimate of $7,795 million.
Goldman Sachs anticipates that NAB's solid performance will be underpinned by double-digit top-line growth. The bank is estimated to achieve total income of $20,951 million, reflecting a significant 14.5% growth compared to the previous year. Once again, this projection slightly outpaces the market consensus of $20,857 million.
Goldman Sachs' estimate comprises a 12.8% increase in net interest income, reaching $16,750 million, and a substantial 22% rise in non-interest income, totaling $4,201 million.
As for dividends, the broker expects NAB to pay a final fully franked dividend of 83 cents per share, bringing the total dividends for the year to $1.66 per share. This falls slightly below the consensus estimate of $1.67 per share. However, in contrast to Westpac's share buyback announcement, Goldman Sachs analysts do not foresee NAB returning additional funds via a share buyback.
Goldman Sachs currently maintains a buy rating and assigns a $30.73 price target to NAB's shares. This implies a potential return of 5% from current levels, which increases to 10.5% when considering forecasted dividends. Investors and market participants will closely monitor NAB's FY 2023 earnings release for further insights into the financial sector's performance.