NAB reveals FY24 results as bank pledges better times ahead for borrowers
National Australia Bank chief Andrew Irvine has declared that Australia is “at the toughest point in the economic cycle” but says there is “light at the end of the tunnel” for nervous borrowers.
The bank revealed its 2024 Financial Year results on Thursday as it forecast a moderate drop in interest rates, with a cut in either February or March, and along with tax cuts Mr Irvine is “optimistic that next year will be better than this.”
In delivering a six per cent drop in full year earnings to $6.96 billion, the bank chief called out the strength of business lending over the year, saying that there had been double digit growth for much of the year as companies took on more debt to expand. Business lending over the full year grew by $48 billion, or 8 per cent.
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By continuing you agree to our Terms and Privacy Policy.“That’s a damn good number,” Mr Irvine said.
The figures also reveal that household and small business mortgage pain is starting to moderate. 14,500 customers were offered hardship in the September quarter compared to 8,100 at the same time last year. That number had grown each quarter up until this one, where those receiving assistance stayed flat.
The results highlighted the two-speed nature of Australia’s economy, with resource-rich Western Australia, Queensland and the Northern Territory performing better than the southeastern states. Victoria in particular was struggling, Mr Irvine said.
“Sectors that are more skewed to domestic retail and discretionary spending are starting to feel it as consumers have had to tighten their belts and budget hard to stay afloat,” he said.
Mr Irvine said he did “worry about a global trade war” under a newly elected Donald Trump and hoped that rhetoric would not match the reality. He was pleased to see that many exporters had diversified their market mix following the banning of exports to China during COVID, and said many were “better placed today ... than four or five years ago” in the event China’s economy was curtailed by US tariffs.
The full year results were primarily affected by NAB opting out of a mortgage price war in the first half of the financial year, as rival lenders competed for market share.
The bank has been seeing that pressure come off - read the mortgage wars have come to a stalemate - and the loan business was growing again.
“In the back half of the year, pricing has gone back above the cost of capital, so now we’re meeting the market,” Mr Irvine said.
More to follow
