National Australia Bank (ASX: NAB) has reported a solid first-quarter performance for the 2025 financial year, with 2% growth in revenue and strong momentum in deposits and lending. However, cash earnings declined 2% due to higher credit impairment charges and tax expenses.
The market has reacted negatively. Shares are currently trading 6.72% lower at $36.86.
For the three months ending 31 December 2024, NAB’s key financial highlights included:
- Revenue growth of 3%, driven by higher Markets & Treasury (M&T) income.
- Deposit balances increased by 2%, reflecting improved performance.
- Home lending grew 1%, with NAB gaining market share.
- Business lending rose 2%, including 1% growth in SME business lending.
Profitability and capital position
- Cash earnings of $1.74 billion, down 2% from the second-half 2024 quarterly average.
- Statutory net profit of $1.70 billion.
- Common Equity Tier 1 (CET1) ratio of 11.6%, reflecting the impact of dividend payments and capital management initiatives.
NAB CEO Andrew Irvine described the result as a strong start to FY25, with the bank continuing to invest in long-term sustainable growth while maintaining disciplined cost management. NAB remains on track to deliver over $400 million in productivity savings in FY25.
Credit quality and impairments
- Credit impairment charge increased to $267 million, driven by business lending and unsecured retail portfolios.
- The ratio of non-performing exposures to gross loans rose to 1.43%, reflecting higher arrears in Australian mortgages and small business lending.
Strategic initiatives and customer support
- NAB has extended Saturday branch openings at 29 high-traffic locations to improve customer access to banking services.
- The bank has joined BioCatch Trust Australia, an inter-bank fraud intelligence network that helps detect scams before payments are made.
- NAB is supporting Australian businesses and farmers with discounted green loans, as part of a $300 million program with the Clean Energy Finance Corporation.
