NAB takes COVID hit

NAB reported unaudited cash earnings of $1.55 billion in the third quarter, down 7 per cent, and warned of “early signs of modest asset quality deterioration”. Some 47 per cent of its business bank customers are now receiving the JobKeeper subsidy, while the percentage of loans that are past 90 days overdue rose 9 basis points to 1.06 per cent.

However, the total number of home loans deferred has fallen from 92,000 to 86,000, with the balance of loans falling to $35 billion, and there has only been a small increase in new home loan deferral requests in Victoria.

“Our 3Q20 result is reflective of the current operating environment, characterised by volatile markets, subdued credit demand, low interest rates, cost pressures and deteriorating asset quality,” said CEO Ross McEwan. “In navigating these near-term challenges, we have not lost sight of the need to invest for NAB’s long-term future.”

NAB also said its target of “broadly flat” FY20 expenses was now “increasingly challenging” due to COVID-19 related impacts on customer support and workout resources.

More to come.