NAB shares fell on Thursday following lower-than-expected earnings as it fights to maintain its position as Australia’s top bank.
In its full-year results, the bank’s underlying profit grew by 1%, despite net profit falling by 2.9% to A$6.8 billion. This disappointed the market, causing shares to slide by 2% in morning trading.
At the time of writing, NAB stocks have fallen by 3.58% to A$42.94.
NAB’s cash earnings came in at $7.1 billion, marking a 2% decrease from the year before and falling marginally short of Visible Alpha’s estimates of $7.2 billion.
Statutory earnings also fell by 3.6% year-over-year to 221 cents, dropping below consensus expectations of 233.9 cents with a full-year dividend of $1.70 per share, staying in line with estimates.
The bank’s expenses also grew by 4.6%, including $130 million for a payroll review and remediation, which had already been flagged.
Despite missing estimates and shares dropping, NAB CEO Andrew Irvine said the increase in underlying profit reflects good momentum as the company executes its refreshed strategy.
“We remain optimistic about the outlook,” Irvine said.
“NAB has a clear strategy and we are well placed to manage our bank for the long term and deliver sustainable growth and returns for shareholders.”
The business has grown 17% over the past three years and has a 22% market share as it continues to fend off increasing competition from Westpac and Commonwealth Bank.
Irvine said he was confident with how the business was growing despite the growing competition.
“Competition is fierce, and it's fierce because it's the best part of the banking market to be playing in,” he said.
“Competition is fierce, and it's fierce because it's the best part of the banking market to be playing in.”
