National Australia Bank reported a full-year cash profit of almost $6.5 billion, more than tripling its dividend to 67 cents per share.
NAB said in a statement released this morning that it navigated a “difficult environment” during COVID-19 to contain cost growth.
The bank earned a $6.4 billion statutory net profit, while cash earnings increased by more than 76% to $6.5 billion.
NAB’s cost growth was limited to 1.8% for the year, assisting in the improvement of its headline financial results, while expenses declined 13.2%.
NAB reported a 5.3 percent increase in housing loans as a result of historically low interest rates and a flourishing property market.
The bank said in its strategic overview that new capabilities on the NAB App resulted in a 50% decrease in the time required for borrowers to complete home loan applications and a 30% reduction in approval time.
“The increase to 67 cents per share in our final dividend increases the total dividend rise for the year to 112 percent and shows our optimism for the future,” NAB CEO Ross McEwan said.
“Our bank is gaining speed, our plan is clear, and when lockdown constraints lessen, we anticipate an increase in activity.”
While there are some uncertainties in the future, especially the impact of reducing support, our balance sheet is robust, and we are well-positioned for Australia and New Zealand’s expected economic recovery.”
NAB’s quarterly statements had an unexpected lesson concerning interest rates: the bank forecasts the RBA will begin raising rates in mid-2023, rather than the previously announced 2024 timeline.
“Unemployment is anticipated to track the same path as GDP, peaking at roughly 4.7 percent in late 2021 before continuing its downward trend and reaching 4.2 percent by end 2022,” the bank stated in its economic outlook.
“This is predicted to result in a gradual acceleration in wage growth and inflation, as well as a gradual increase in cash rates beginning in mid-2023.”
NAB forecasts that Australia’s GDP will contract by 3.8 percent in the September quarter as a result of COVID-19 lockdowns, before rebounding to a positive 4% in 2022.