May 2 (Reuters) – National Australia Bank (NAB.AX), opens new tab posted a double-digit drop in first-half earnings on Thursday but talked up the strength of the economy and said a margin-crunching struggle for the vital home loan market showed signs of easing.
The first of Australia’s big four banks to front up to investors this reporting season, NAB’s results were closely watched for signs that the squeeze on profits from tough mortgage and deposit competition is coming to an end.
Cash earnings for the six months ended March 31 fell 13% versus a year earlier to A$3.55 billion ($2.32 billion) as costs for the nation’s second-biggest mortgage lender rose and competition tightened margins.
However, the bank pointed to the shallower 3.1% quarter-on-quarter fall as evidence pressure was moderating, with margins on new home loans to new customers rising over the past quarter.
Shares were up 1.7% to A$34.4 just before lunch.
NAB also announced it would double a buy-back program begun last August to A$3 billion.
CEO Andrew Irvine, who took the reins last month, said the economy was performing better than expected and many industries including mining, manufacturing and healthcare were still growing strongly.
Source: REUTER
