NAB Posts 8.3% Increase in Cash Earnings in FY22

National Australia Bank (NAB), one of the four largest financial institutions in Australia, today released its 2022 Full Year Results to the market, showing a slight increase in cash earnings in FY22.

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Operating Performance FY22 vs FY21

• ​Cash earnings rose 8.3% and all businesses contributed to underlying profit growth of 11.5%.

• Revenue increased 8.9%. Excluding the impact of the Citi consumer business, revenue rose 7.8% mainly reflecting higher volumes and slightly higher margins excluding Markets & Treasury (M&T).

• Gross loans and advances (GLAs) increased 9.3% and deposits rose 13.3%. Excluding the impact of the Citi consumer business, GLAs increased 7.3% (with housing lending up 5.6% and non-housing lending up 9.6%) and deposits rose 11.4%.

• Net Interest Margin (NIM) decreased 6 basis points (bps) to 1.65%. Excluding a 1 bp increase from the Citi consumer business and an 8 bps reduction from M&T which includes the impact of holding higher liquid assets, NIM rose 1 bp. This primarily reflects higher earnings on deposits and capital as a result of the rising interest rate environment, mostly offset by home lending competition.

• Expenses increased 5.8%. Excluding the impact of the Citi consumer business, expenses rose 3.9% with key drivers including higher remuneration and volume related costs, higher technology and investment costs and increased financial crime and remediation spend, partly offset by productivity benefits.

"This outcome reflects continued execution of our strategy including targeted volume growth and a disciplined approach to managing costs while investing for growth. After 11 years of interest rate reductions, earnings have also benefitted in FY22 from the rising interest rate environment," said Ross McEwan, CEO at NAB.

"Our strategy is long term, and is not dependent on any particular operating environment or economic conditions. It is centred around an enduring ambition to improve the outcomes for our customers and colleagues. We have made good progress over the past two years which positions us well for a changing environment. However, there is more we can do. We will continue to remain focused on the disciplined execution of our strategy to support sustainable growth in earnings and shareholder returns over time," McEwan added.