📬 Third Quarter 2024: NAB's Lending Balances Show 1% Increase

NAB reported a loss in underlying profit of 2%, compared with the quarterly average of 1H24, underpinned by the decline in revenues and a relatively stable net interest margin with increasing expenses.

The Details:

• The third quarter of 2024 is more stable for the bank, supported by execution against plans. Lending balances increased by 1% in the June quarter, which was underpinned by a strong increase of 3% in lending to small and medium-sized Australian businesses.

• One of the priorities for the third quarter of 2024 is deposit growth in business, private banking, and personal banking. The bank delivered further efficiency benefits this quarter, helping manage costs while investing for long-term sustainable growth. The bank remains on target to deliver productivity savings of around $400 million in FY24 and for cost growth in FY24 to be lower than FY23.

• A $118 million credit impairment charge reflects asset quality deterioration across the Group, partially offsetting methodology refinements. The ratio of collective provisions against credit risk-weighted assets increased by 4 bps to 1.51 percent. Non-performing exposures to gross loans and acceptances increased by 11 bps to 1.31 percent, mainly due to deteriorating business and private banking business lending portfolios and higher Australian mortgage arrears.

• The Group raised $35 billion in term funding from July to July and has repaid all of its obligations, including the $18 billion that was maturing in June. As at 30 June 2024, $1.5 billion of the $3 billion on-market ordinary share buyback had been completed and 48,000,774 ordinary shares were cancelled. The remaining buyback is expected to be completed by May 2025, which clearly provides the timeline for investors and stakeholders.

In summary:

Cash earnings and underlying profit are two key financial indicators that mainly relate to financial performance and are most important to investors. The actual outcome could differ due to many factors, including: any change in the Group's financial environment; any change in law or regulation; risks and uncertainties relating to the Russia-Ukraine and Israeli-Palestinian conflicts, and any other geopolitical tensions.

 Why it matters:

It helps the investor in keeping track of such factors and their direct impact on the group's financial performance and its share price. In this way, an investor is sure to get the best investment decision in companies by staying ahead of Geopolitical Risks and Regulatory Changes.

Bottom Line :

Understanding the fact that external factors are playing a critical role in changing the financial performance of a firm is very important in making informed investment decisions. Staying informed and monitoring the risks helps an investor in handling the associated uncertainties of returns on their investments.