National Australia Bank Q3 cash earnings rise on lower bad-loan charges

National Australia Bank reported a 5.2% rise in third-quarter cash earnings to A$2.15 billion, beating analyst expectations, as lower bad-loan provisions offset margin compression from elevated funding costs.

The bank’s impairment charge for credit losses fell 10% year-on-year to A$420 million, reflecting improved asset quality across its retail and business lending portfolios. Chief Executive Ross McEwan noted that the reduction in provisions was driven by stronger economic conditions and disciplined risk management.

Net interest margin, however, declined 5 basis points to 1.81% as higher funding costs weighed on profitability. The bank attributed the margin squeeze to rising deposit rates and competitive lending conditions in Australia’s mortgage market.

Cash earnings per share increased 6.1% to 62.3 cents, surpassing the median estimate of 60.1 cents among analysts surveyed by Refinitiv. Revenue rose 2.3% to A$5.8 billion, supported by growth in home lending and business banking.

National Australia Bank maintained its full-year guidance for cash earnings growth of 3-5%, citing confidence in its core markets despite macroeconomic headwinds. The bank’s shares were up 1.2% in early trading in Sydney on Wednesday, outperforming the broader S&P/ASX 200 index.

Analysts at Macquarie said the results underscored the bank’s resilience amid a challenging interest-rate environment, while UBS highlighted the benefit of lower credit costs as a key tailwind for margins in the near term.