National Australia Bank Ltd.’s first-half profit fell short of analyst estimates as a boost to margins from higher interest rates was offset by caution on the economic trajectory.
(Bloomberg) — National Australia Bank Ltd.’s first-half profit fell short of analyst estimates as a boost to margins from higher interest rates was offset by caution on the economic trajectory.
Cash earnings rose to A$4.07 billion ($2.72 billion) in the six months ended March 31, the Melbourne-based firm said in a statement Thursday. That’s its best half-year profit on record, though it missed the A$4.18 billion estimate in a Bloomberg survey of analysts.
Australian banks have been reaping the rewards of aggressive interest-rate hikes over the past year that fueled banks’ revenue from lending. Now, with markets pricing a pivot from the nation’s central bank to rate cuts later this year, some analysts argue earnings growth may begin to ebb.
“While there are encouraging signs that inflation is moderating and interest rates are peaking in Australia, the full impact of higher cost of living and higher interest rates on the outlook remains uncertain,” the bank said in the statement.
NAB shares have underperformed the Australian financial sector index in the past year, falling more than 10%.
(Updates with detail on outlook from first paragraph)
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