(Reuters) -National Australia Bank Ltd on Tuesday posted an almost 6% rise in third-quarter cash profit as it benefited from an increase in home and business loans as well as higher interest rates.
Runaway inflation has prompted the Reserve Bank of Australia to tighten monetary policy this year, aiding the margins of banks that had to grapple with record-low interest rates and stiff competition in the home-lending market for the past two years.
Melbourne-based NAB, as well as other members of Australia’s “Big Four”, have entirely passed on to customers the 175-basis-point increase in interest rates since May.
Excluding revenues from its markets and treasury business and the impact of acquiring Citigroup’s Australia consumer business, NAB’s net interest margin for the quarter was up slightly, compared with the first half’s quarterly average.
The acquisition of Citi’s Australian consumer business became effective on June 1.
Cash profit at Australia’s second-largest lender was A$1.80 billion ($1.26 billion) for the quarter ended June 30, compared with A$1.70 billion a year ago. The figure was in-line with a Morgan Stanley estimate of A$1.80 billion.
Costs for fiscal 2022 are now expected to rise between 3% and 4%, NAB said.
($1 = 1.4325 Australian dollars)
(Reporting by Harish Sridharan and Sameer Manekar in Bengaluru; Editing by Aditya Soni)
