National Australia Bank has narrowly beaten first quarter profit expectations, even though its flat result was weighed down by record-low interest rates and an uptick in tech and investment costs.
Australia’s third-largest lender posted unaudited cash earnings of $1.65 billion for the three months ended December 31, slightly higher than analyst expectations.
Shares in the lender jumped 2.86 per cent to $26.88 after an hour of trade on Thursday, a near three-month high.
The bank has now added 9.0 per cent to its share price so far in 2020.
Compared with the 2019 second-half quarterly average, revenue rose less than 1.0 per cent, reflecting a slightly higher net interest margin.
Unaudited net profit was $1.70 billion for the period.
NAB also flagged that it was pushing back the sale of its MLC wealth business for the time being.
“Work on operational separation has progressed well but the business environment remains challenging,” NAB said in a release on Thursday.
“This may defer exit beyond FY20.”
NAB’s common equity tier 1 ratio rose to 10.6 per cent at December 31 – from 10.38 per cent at September 30 – to rise above APRA’s unquestionably strong 10.5 per cent benchmark.
Credit impairment charges fell 21 per cent to $185 million compared with the second half quarterly average, driven by a non-repeat of NZ dairy impairments and higher house prices.
NAB’s update follows a strong first-half performance by Big Four rival Commonwealth Bank on Wednesday.