National Australia Bank (NAB) has reported a profit of a US$1.75 billion in the 3rd quarter of this fiscal year. The profit has calmed down the fears of the bank to be hit by bad loans and boosted the shares of this bank.
The biggest lender of Australia to small and medium businesses, NAB, stated on Monday that the lowered bad-debt charges in Australia is the main reason behind a 9% annual bounce in profits for the quarter that end in June, 2015.
In the previous week, ANZ triggered a rancorous sell-off in banks and raised capital as well as lifted provisions for bad loans. Owing to this, NAB identified that these issues were not industry-wide. The shares of ANZ Bank, NAB, Commonwealth Bank, and Westpac rose at least 1%. However, NAB also highlighted the competitive pressure on that came along the profits and the bank has reported a congestion on margins and moderate rise in revenue.
NAB is booking up to US$1.05 billion in provisions pertaining to the misconduct in its British wing, dragging down the profits. However, the bank has already set aside the money for this purpose. On the other hand, the trading update from NAB stated that the charges for bad and doubtful loans have fallen 15% to US$193 million in this quarter in comparison to a soft update from ANZ in the previous week.
Mr. Victor German, a CBA equities analyst, stated that the information provided by NAB did not indicate a market-wide lift in bad loans. The bank is the biggest SME lender in Australia, and the credit-quality metrics of NAB have enhance in this quarter, he added.