The National Australia Bank Ltd (ASX: NAB) share price could be a mover on Thursday after the company released its third-quarter trading update.
Image source: Getty Images
How did NAB perform in the third quarter?
The NAB share price will be in focus today after the bank reported an unaudited statutory net profit of $1.65 billion and unaudited cash earnings of $1.70 billion for the June quarter.
NAB's revenue fell 1% as declines in Markets & Treasury (M&T) income outweighed higher volumes and margins in its lending businesses.
The M&T division experienced limited trading opportunities, impacted by current global monetary policy settings.
Excluding M&T, the group's revenue would have increased by 1.9%.
The bank's net interest margin (NIM) was broadly stable, reflecting lower deposit and funding costs, partly offset by the impact of low-interest rates and home lending competition.
NAB's expenses fell 1% for the quarter with productivity benefits outweighing the bank's technology and investment spend.
The company chose to compare today's figures against FY21 first-half quarterly averages, which reflect a 1% increase in cash earnings and a 1% decrease in cash earnings before tax and credit impairment charges.
Management commentary
NAB Chief Executive Officer, Ross McEwan was pleased with the quarter, saying:
Our performance this quarter is encouraging. Cash earnings rose 10.3% compared with 3Q last year, supported by significantly better credit impairment outcomes.
Particularly pleasing is the strong momentum across our business. In Australia, lousing lending rose 2% and SME business lending grew 4.3%, both outpacing system in recent months. Our New Zealand business also delivered robust growth with lending up 2.7%. These outcomes are a result of the decisions and investments we are making, which are having a positive impact for customers and colleagues.
We have a clear focus on where and how we will continue to grow. The exit of MLC Wealth is now complete, and the acquisitions of 86 400 and Citigroup's Australian consumer business will help accelerate our growth strategy.
Despite the near-term uncertainty and challenges for the Australian economy in the wake of recent lockdowns, McEwan remains confident in the long term:
However, we remain optimistic about the long-term outlook for Australia and New Zealand. 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.
NAB share price snapshot
The NAB share price has rallied 18.75% year to date and is up 48.9% in the last 12-months.
However, NAB shares have struggled to make a meaningful move above their pre-COVID highs of about $27.40.
