This morning, National Australia Bank Ltd. (ASX: NAB) kicked off a week of major bank reporting by announcing a full-year cash profit of $5.84 billion for the 12 months ended 30 September 2015.
However, despite NAB announcing a cash profit that was a solid 15.5% higher than its 2014 result, the market appears unenthusiastic about the numbers.
NAB shares were trading 1.5% lower shortly after midday today, while Commonwealth Bank of Australia (ASX: CBA) and Australia New Zealand Banking Group (ASX: ANZ) were also lower, but staging a recovery.
The heavy selling pressure on the banks, major miners and Woolworths Limited (ASX: WOW) was weighing on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
Deflating share prices
A release from the Australian Bureau of Statistics this morning showed a lower-than-expected inflation read, which may also explain some of the weakness in share prices — although lower inflation is generally good news for the banks because it heightens the chance of a rate cut which in turn stimulates credit markets.
However, it could merely be a case of market jitters. Especially in the face of the mixed economic outlook painted by NAB, as well as the fact that credit growth in the Australian market could be expected to remain subdued for some time.
At today's prices, savvy investors may be wise to watch NAB, CBA, ANZ and Westpac Banking Corp (ASX: WBC) shares from the sidelines. At least until we're afforded a more compelling buying opportunity.
