Earlier this morning, Australian banking giant the National Australian Bank [ASX:NAB] released its half-year result for FY2023.
While the bank released some strong results for the past six months, shares were not displaying much support for the bank.
Having dropped more than 7.5% in share price by the mid-morning, NAB was trading for around $26.38 at the time of writing.
Over the last 12 months, the bank has flopped by 18.5%, and it’s down more than 8% in the financial sector even as the wider market and other banks have been falling after the latest FED rate rise of 0.25%:
Source: TradingView
NAB reports its 2023 half year results
Early on Thursday morning, NAB put out its much-anticipated results for the first six months of the financial year. Though they were strong by their own merit, they failed to excite in the eyes of analysts.
In its half year results, the banking group posted a statutory net profit of $3.96 million and cash earnings of $4.07 million, which had gone up 17%.
Towards the end of March, the group said that it had increased its revenue by 19.3%. However, when not including the Citi consumer business, revenue had increased 16.6%.
The group’s management asserted that this result reflected higher margins which performed well in combination with stronger volumes, as well as markets and treasury income.
NAB said that it increased its NIM 17 basis points to 1.77%, which was earned through higher earnings on deposits and capital through rising interest rates.
While this was an increase for the half, it was still slightly down in comparison with the end of Q1 results.
However, NAB said that the NIM was partially offset by competition in the home lending segment as well as increasing funding expenses.
Additionally, it was below an estimate put forward for Goldman Sachs of the expectation for the bank to reach 1.83% for the half.
NAB said that these results enabled the bank to declare a fully franked interim dividend of 83 cents a share, an increase of 13.7%.
Again, while another increase, it’s slightly below Goldman Sach’s estimate for 84 cents a share in dividends.
NAB racked up 11.6% more in expenses in the half, and not including the Citi businesses, they had risen by 6.3%.
These expenses were upped through increases in salary, tech investments, compliance, and other activities, though these did boost productivity.
NAB’s $4.07 million in cash earnings was solid, yet this too was under the consensus estimate of $4.15 million.
These results may have pulled down the bank’s share price today, but falling too are other Australian stocks in reaction to the FED’s latest rate raise of 0.25% with no indication of when these will ease.
Jim Rickards’ Sold Out book offer – grab your copy now
Supermarkets are down on random items, and banks are permanently closing more and more branches.
Used car prices are rising (prices in general are skyrocketing), and packaging is shrinking.
Is it all just inflation, COVID ramifications and market volatility, or is there more to the story?
Mere ‘inconveniences’ may just be the start…
Geopolitical expert Jim Rickards has been making on-point predictions for decades.
And now he’s predicting ensuing financial chaos.
He explains it all in his book, SOLD OUT: How Broken Supply Chains, Surging Inflation, and Political Instability Will Sink the Global Economy.
You can grab a free copy when you sign up for The Daily Reckoning Australia right here.
Regards,
Mahlia Stewart
For The Daily Reckoning Australia
