National Australia Bank (NAB) H2 2024 earnings summary

Executive summary

• Delivered sound FY24 financial results with cash earnings of $7,102m, down 8.1% year-over-year, amid a more stable second half and resilient Australian economy despite higher interest rates and cost of living pressures.

• Statutory net profit for FY24 was $6,960m, down 6.1% compared to FY23.

• Maintained prudent balance sheet settings, with a focus on customer support, digital innovation, and strategic investment in core business segments.

• Supported customers facing higher living costs and interest rates, with increased hardship assistance and digital financial wellbeing tools.

• Strategy refresh aims for stronger customer advocacy, speed, and simplification, with continued investment in technology and digital transformation.

Financial highlights

• Cash earnings of $7,102m, down 8.1% year-over-year; statutory profit $6,960m, down 6.1%; underlying profit $10,823m, down 6.9%.

• Net interest margin 1.71% in Sep 24, down 2–3 bps half-on-half; excluding Markets & Treasury, NIM fell 6 bps.

• Operating expenses increased 4.5% year-over-year, driven by higher personnel and technology costs.

• CET1 capital ratio at 12.35%, above target range; leverage ratio (APRA) at 5.1%.

• Dividend per share 169c (final 85c), payout ratio 73.7%.

Outlook and guidance

• Investment spend to increase to approximately $1.8 billion in FY25, focused on customer advocacy, technology modernization, and simplification.

• Productivity savings targeted at over $400 million in FY25 to offset cost growth.

• Opex growth expected to be lower in FY25, with salary and restructuring costs expected to slow.

• Business credit growth forecast to moderate to around 5% in 2025, but remain stronger than housing credit growth.

• Australian and New Zealand economies expected to recover in 2025–26, with RBA rate cuts anticipated from early 2025.