Own NAB (ASX:NAB) shares? What to expect from its FY21 results

NAB's full year results aren't far away…

| More on:
CBA share price money laundering asx bank shares represented by large buidling with the word 'bank' on it

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

National Australia Bank Ltd (ASX: NAB) shares will be one for investors to watch next month.

This is because the banking giant is scheduled to release its full year results early in November.

Ahead of the release, I thought I would look to see what the market is expecting from the bank in FY 2021.

What is expected from NAB in FY 2021?

According to a note out of Bell Potter, its analysts are expecting a solid result from the bank next month.

The broker has pencilled in cash earnings of $6,452 million for the 12 months, up 73.9% year on year. On a per share basis, this is expected to lead to cash earnings of 195 cents, which is an increase of 62% on FY 2020's numbers.

As for dividends, the broker is expecting NAB to declare a fully franked final dividend of 60 cents per share. This will bring the company's full year dividend to 120 cents per share, which is double what it paid in FY 2020.

Based on where NAB shares are trading now, this represents a 4.2% yield for investors.

What did the broker say?

Bell Potter summarised its expectations for FY 2021.

It commented: "Our forecasts include: 1) statutory earnings $6.30bn; 2) cash earnings $6.45bn; 3) cash EPS 195¢; 4) cash earnings ex-large notable items (i.e. excluding restructuring-related costs and customer-related remediation) $6.52bn; 5) cash EPS ex-large notable items 197¢; 6) fully franked final dividend 60¢; 7) ROE 10.6% (10.7% ex-large notable items); 8) NIM 1.74%; 9) credit impairment charge $0.00bn/0bp GLA; and 10) Level 2 CET1 ratio 11.7%."

"The performance reflected better credit impairment outcomes with ongoing momentum across home, SME and New Zealand lending. The bank still remains "optimistic about the long-term outlook for Australia and New Zealand" – still positive overall in the long run," it added.

Are NAB shares in the buy zone?

Bell Potter believes NAB shares are trading at an attractive level.

The broker has reiterated its buy rating and $31.00 price target on its shares.

Based on the current NAB share price, this implies potential upside of 9.1%. And if you include dividends, this improves to 13.3%.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

Shocked office worker staring at computer screen with colleagues working in the background.
Bank Shares

The ASX bank share beating CBA in 2025

Many investors might not realise this smaller bank stock is leading the pack this year. 

Read more »

man thinking about whether to invest in bitcoin
Bank Shares

Here's what needs to happen for the CBA share price to try and reach $200

What could drive the CBA share price higher?

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Bank Shares

Why now could be an opportune time to sell CBA shares

A leading expert offers his verdict on the outlook for CBA shares.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Bank Shares

The Westpac share price is a buy – UBS

The broker is optimistic on Westpac shares.

Read more »

Bank building with the word bank on it.
Bank Shares

The biggest buyers and sellers of ASX 200 bank stocks revealed

Macquarie breaks down who’s been buying and who’s been selling the ASX 200 bank stocks.

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Resources Shares

Should I switch my ASX 200 banking stocks for ASX 200 miners before earnings season?

The ASX 200 Index is dominated by Australia's bank and materials/mining sectors, which together account for around half of the…

Read more »

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.
Bank Shares

Here's when Westpac says the RBA will now cut interest rates

The RBA surprised everyone by keeping rates on hold last week. So, when will the next cut happen?

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Bank Shares

This is the ASX bank stock with the largest dividend yield right now

Looking to ASX bank stocks for dividend income right now?

Read more »