NAB ‘pleased’ by booming $7 billion profit – admits to windfall from rising rates
The National Australia Bank has posted a “pleasing” $6.89 billion profit on the back of increasing interest rates.
The bank’s chief executive Ross McEwan said after 11 years of interest rate reductions, the profit result benefitted from the increase in interest rates. There have been seven hikes in mortgage rates so far this year and another five have been forecast, including one next month.
McEwan said the higher rates along with increased inflation was likely to “challenge some customers”.
“However, strong employment conditions along with substantial household and business savings give us confidence in the resilience of customers and the broader economy,” McEwan said.
The statutory profit was an 8.3 per cent increase on 2021 and its cash earnings of $7.1 billion was up a similar level.
A final dividend of 78 cents a share, fully franked, was declared.
“We enter 2023 well positioned for what is likely to be a more challenging environment,” the bank said.
It has forecast a softening level of consumer consumption with GDP falling to 1 per cent over the 2023-24 and unemployment rising to 4.5 per cent by 2024.
Stay informed, daily
It expects inflation to peak in December and fall throughout 2023 while the Reserve Bank’s cash rate, which determines the mortgage rates offered by banks, will peak in March at 3.6 per cent from the current 2.85 per cent.
“But a more inflationary outcome would likely mean greater monetary policy tightening and a more pronounced economic correction,” the bank said.
