The National Australia Bank joins the reporting list of the big banks this Thursday and investors will be looking for a repeat of the ANZ’s sold result, with help, like the ANZ, from a sharp fall in bad debt provisions.
On Friday, Commonwealth Bank shares closed down 0.9%, ANZ lost 1%, Westpac was 1% as well lower and the National Australia Bank shares lost 0.7%. Over the week, the banks finished down in the case of the CBA, while the NAB was up 0.6% ahead of its report being released Thursday morning.
Analysts say the NAB’s figure will be around $6.6 billion and Westpac (next week) around $8 billion. The Commonwealth has already reported net earnings of nearly $10 billion for the June 30 year but will issue an update in mid-November.
Like the ANZ, the NAB’s 2015-16 result bore the brunt of a big clean up – this time in the cost of the bank’s long UK adventure finally being brought to account along with a loss on the sale of 80% of its insurance business to a Japanese buyer.
The NAB said full-year profit slumped 94% on the loss-making asset sales of its Australian life insurance and UK banking businesses, but it has reported a 4.2% rise in cash earnings to $6.48 billion (which is where the comparison will be made this week).
The NAB posted a statutory profit of just $352 million, although it said net profit would have been only 5.6% lower at $6.42 billion if the losses on UK banking business CYBG (the old Clydesdale Bank) and NAB Wealth’s life insurance division were excluded.
In May the NAB reported a first half cash profit of $3.29 billion, up 2.3%, thanks to higher home and business lending.
Like the ANZ, analysts expect the NAB to have reported a sharp improvement in results from its Australian retail bank, and a sharp fall in bad debt impairments and losses.
The ANZ reported a $757 million drop in that provision which in turn allowed the bank to boost earnings. The total provision fell from $1.9 billion a year ago to around $1.2 billion by September 30.
The interim dividend of 99 cents fully franked was unchanged and analysts reckon the final on Thursday will also be unchanged.
Building products group, CSR also reports its interim results on Wednesday.
