NAB's Earnings May Fall, Could Face Capital Challenges -- Market Talk

Dow Jones05-03

0228 GMT - NAB's pre-provision earnings are on track to decline around 5% in FY 2024, say Macquarie analysts in a note, following the Australian lender's 1H FY 2024 results. "While lending pressures are moderating, we expect deposit-led margin headwinds to persist," Macquarie says, noting that NAB's pro-forma CET1 is below that of peers, leaving a smaller buffer for potential credit quality deterioration or stronger balance sheet growth. "We were surprised with the size of the announced buyback, given NAB's pro-forma level 1 CET1 ratio is now below 11.5%," says Macquarie. It reckons that if credit quality deteriorates or credit growth surprises to the upside, NAB may face capital challenges in FY 2026 and beyond.(alice.uribe@wsj.com)

(END) Dow Jones Newswires

May 02, 2024 22:28 ET (02:28 GMT)

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