National Australia Bank (NAB) H2 2024 earnings summary

Executive summary

• FY24 cash earnings were $7,102m, down 8.1% year-over-year, with statutory net profit at $6,960m, down 6.1% from FY23.

• Delivered sound performance amid a more stable operating environment, with resilient Australian economy but ongoing challenges from high interest rates and cost of living.

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

• Strategic focus remains on SME franchise growth, proprietary lending, customer centricity, simplification, and technology investment.

• Maintained prudent balance sheet settings and strong capital ratios, supporting continued investment and shareholder returns.

Financial highlights

• Cash return on equity declined to 11.6% from FY23 peak, aligning with FY22 levels.

• Net interest margin was 1.71% in Sep 24, down 3 bps year-over-year; excluding Markets & Treasury, NIM fell 6 bps.

• Operating expenses increased 4.5% YoY, driven by higher personnel and technology costs.

• Final dividend set at 85 cps, fully franked, bringing total FY24 dividends to 169 cps (73.7% payout ratio).

• Completed $7.4bn in share buybacks since August 2021, including $2.1bn in FY24.

Outlook and guidance

• Australian GDP growth expected to gradually recover, with 1% forecast for 2024 and 2.25% for 2025-2026; unemployment rate to rise slightly before stabilizing.

• Investment spend to increase to ~$1.8bn in FY25, focused on customer advocacy, simplification, and tech modernization.

• Productivity savings targeted at over $400m in FY25.

• Cost growth expected to slow further in FY25, with OpEx ratio around 40%.

• RBA expected to begin easing rates in early 2025, supporting household income growth.