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Date : 17/11/2022

National Australia Bank (ASX: NAB) shares surged on FY22 Results, drawing massive Investors’ attention towards the Big Four Banks!

National Australia Bank Limited (ASX: NAB) is among the top four Australian banks based on market capitalization, earnings, and market share. NAB is among the world’s largest banks by market value and assets. Its headquarters are in Melbourne, Australia, and it began operations in 1981. Its subsidiaries include the Bank of New Zealand, JBWere Ltd., and others.

NAB shares rose when the company announced its FY22 results last week. NAB reported positive numbers, so NAB stock is drawing massive investors’ attention not only towards the stock itself, but also towards the big four banks.

Here are our latest news and analysis on ASX-NAB shares.


NAB Shares: FY22 Results Highlight

NAB shares surged slightly on FY22 results to trade at $31.35. The current market cap of the company is approximately 98.87 Billion AUD.

National Australia Bank Shares News & Analysis

  1. NAB’s announced statutory NPAT increased by 8.3% to $6.89 billion in FY22.
  2. The company’s cash profits reached $7.1 billion in FY22, an 8.3% rise over the previous year.
  3. After the year, its CET1 capital ratio was 11.51%.
  4. For FY22, NAB has increased its final dividend payout to $0.78 per NAB share, a 16% increase over FY21.
  5. The total dividend for FY22 is $1.51 per share, an increase of 19% from the previous year.


Value of NAB Shares: What Else Happened?

The company found this to be a satisfying outcome. The bank said its underlying profit growth was 11.5% higher than previously reported. It remains dedicated to expanding its customer base and doing it efficiently, all while keeping its expenses in check and reinvesting in its future. The value of NAB shares may affect the company’s profit performance.

The amount of money a bank earns on its loans, known as the net interest margin (NIM), decreased by six basis points to 1.65%.

The rise in expenses came at 5.8%, representing a substantial leap from the previous year. Spending went up by 3.9%, with the major contributors being increases in compensation and volume-related costs, technology and investment expenditures, and financial crime and remediation spending, somewhat offset by productivity gains.

Overdue loans and impaired assets declined from 0.94% in loans in FY21 to 0.66% in FY22.

According to the report, the projected benefit of cash rate rises beginning in October 2022 is “expected to be smaller,” while competitive pressures in the home loan market are “likely to grow.” The NIM effect of RBA cash rate increases on unhedged deposits is also predicted to reach its highest point in the first half of FY23.


Outlook for NAB Share Price

The significant financial institution predicted that competition in the mortgage loan market will “likely escalate.”

NAB has a growing challenge from the composition of its deposit base, which is increasing financing costs.

The predicted effect of RBA cash rate hikes from October 2022 is “likely to be reduced,” yet the estimated NIM impact on unhedged deposits peaks in the first half of FY23.

Although a higher inflationary result would likely require stronger monetary policy tightening and a more significant economic correction, NAB predicted that the cash rate would reach 3.6% in March 2023.



Should you add NAB shares to your “to buy” list?

If we look at the facts, we can see that NAB had another stellar year of growth and increased dividends.

Nonetheless, it’s intriguing to note that NAB is still bringing up intense competition and that the benefits of cash rate rises are predicted to be diminished. There has been a recent drop in the NAB share price, although year-to-date, they are up more than 6%.

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