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NAB revealed a $1.6 billion unaudited statutory net profit in its third quarter trading update last week, up by 6 per cent from the same period in 2020, when the pandemic had taken hold.
Cash earnings of $1.7 billion had risen by 10.3 per cent from the prior corresponding period, supported by better credit impairment outcomes this year, NAB chief executive Ross McEwan said.
There had been a $112-million decrease in the provision for bad loans associated with COVID, reflecting improved asset quality across both housing and business lending, as well as higher house prices.
The ratio of loans more than 90 days overdue and gross impaired assets to gross loans and acceptances decreased by 10 basis points to 1.13 per cent, from 1.06 per cent in 3Q20.
NAB had also sold $1.5 billion in aviation loans in May, to de-risk the portfolio.
In the Australian business, housing lending rose by 2 per cent and SME business lending grew by 4.3 per cent, while the New Zealand business also saw its lending grow by 2.7 per cent.
Meanwhile, Mr McEwan acknowledged that while continued virus outbreaks and lockdowns are creating uncertainty and challenges for the bank’s customers, NAB remains optimistic about the long-term outlook.
“The strong economic momentum leading into this period, ongoing government support and customers’ relatively healthy starting positions give us confidence that once restrictions are eased, the economy will again bounce back,” the CEO said.
NAB recently secured Citigroup’s local consumer bank for $1.2 billion, after it bought neobank 86 400 earlier this year.
Mr McEwan stated the bank has a “clear focus” on its growth, with the acquisitions to help accelerate its expansion strategy.
NAB also noted that it had invested a further $100 million over the 2021 financial year in its branch transformation program, in addition to $60 million in FY20.
The bank opened four of its new-format branches in early July, after closing 72 branches between 1 January 2020 and 25 May 2021.
NAB told a parliamentary committee that it was unable to state “with confidence” how many branches would be left at the end of the year. As at 25 May, it had 548.
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