Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

NAB (ASX:NAB) share price on watch on strong profit in FY22 result

The National Australia Bank Ltd (ASX:NAB) share price is in focus as the bank reports its FY22 result. It revealed an even bigger dividend.

The National Australia Bank Ltd (ASX: NAB) share price is in focus as the bank reports its FY22 result.

NAB is the last of the major banks to reveal its numbers for the 12 months to September 2022.

NAB FY22 result

Here are some of the main numbers reported by NAB for the year:

  • Statutory net profit after tax (NPAT) rose 8.3% to $6.89 billion
  • Cash earnings increased by 8.3% to $7.1 billion
  • The CET1 capital ratio was 11.51% at the end of the year
  • Final dividend of $0.78 per share, up 16%
  • Total FY22 dividend of $1.51 per share, up 19%

Management described this result as pleasing. The bank reported that underlying profit growth increased by 11.5%. It continues to target volume growth, while being disciplined with managing costs and investing for growth. Profit performance usually makes a difference to the NAB share price.

Revenue increased by 8.9%, or 7.8% excluding the impact of the Citi consumer business acquisition.

Gross loans and advances (GLAs) increased 9.3% and deposits rose 13.3%. Excluding the impact of the Citi consumer business, GLA increased 7.3%, with housing lending up 5.6% and non-housing lending up 9.6%.

Net interest margin (NIM)

NAB reported that the NIM decreased by 6 basis points (0.06%) to 1.65%.

Excluding a 1 basis point (0.01%) increase from the Citi consumer business and an 8 basis point (0.08%) reduction from markets & treasury which includes the impact of holding higher liquid asset, NIM rose 1 basis point.

NAB said that the above effects primarily reflect higher earnings on deposits and capital as a result of the rising interest rate environment, mostly offset by home lending competition.

The NIM is very important for banks because it shows how much profit it’s making from its lending. Therefore, improvement in the NIM could be a help for the NAB share price.

Investors are thinking that the higher interest rates will lead to better profit.

NAB revealed that its fourth quarter NIM was 1.72%, an increase of 10 basis points (0.10%) compared to the third quarter.

Outlook for FY23

The big bank said that housing lending competitive pressures are “likely to intensify”.

NAB’s mix of deposits is an accelerating headwind, with a further increase in funding costs.

The NIM impact of RBA cash rate increases on unhedged deposits is expected to peak in the first half of FY23, however the estimated benefit of cash rate increases from October 2022 is “expected to be lower”.

NAB suggested that the most likely scenario is that the cash rate will reach 3.6% in March 2023 “but a more inflationary outcome would likely mean greater monetary policy tightening and a more pronounced economy correction.”

My thoughts on the NAB share price

Taking the numbers by themselves, I thought this was another impressive performance of growth by NAB, with bigger dividends too.

However, it’s interesting that NAB is still referring to strong competition, and the benefit of cash rate increases is expected to be lower.

I believe that NAB is the best of the big four banks to own, but I’m going to keep my eyes on how the NIM develops – as hopes of increased profitability has driven the NAB share price higher up until now.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content