National Australia Bank (NAB) has reported cash earnings of A$1.65bn for the third quarter of fiscal 2018, a fall of 3% compared to A$1.7bn last year and down 1% from the quarterly average of the March 2018 half year figure.
The bank attributed the fall in earnings to higher impairment charges and investment spend.
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Expenses increased 2% from the quarterly average of the March 2018 half year, driven by higher compliance costs.
Revenue rose 1% from the quarterly average of the March 2018 half year figure. The rise was driven by growth in SME lending within the business & private banking segment and contribution from New Zealand Banking, the bank said in its trading update.
The banking group’s CET1 ratio stood at 9.7% at the end of June 2018, versus 10.21% in the previous quarter. Its leverage ratio was 5.3% on APRA basis.
NAB CEO Andrew Thorburn said: “Notwithstanding a challenging operating environment, financial performance in 3Q18 has been sound. Revenue is up, despite elevated short term wholesale funding costs, while asset quality and balance sheet metrics remain strong.
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By GlobalData“As we make progress towards resolving several previously disclosed regulatory compliance investigations, we expect to recognise additional provisions in the 2H18 result, noting there are significant uncertainties in determining a provisioning outcome at this time. These additional costs will be excluded from the expense growth guidance of 5-8% for FY18.”
