NAB update shows some clients are still struggling to repay their loans
The National Australia Bank has released what has been described as a “strong” quarterly transaction update, showing some customers are still struggling to repay their loans.
The Big Four Banks reported unaudited statutory net profit of $ 1.65 billion for the June quarter, up from $ 1.5 billion for the same period last year when the Covid-19 pandemic was setting in and that she was rushing to accommodate loan deferrals.
This year there have been “better results on credit depreciation,” said Managing Director Ross McEwan.
But he noted that the health crisis and lockdowns are creating uncertainty and challenges for some clients.
As the ratio of over 90 days past due and gross impaired assets to gross loans and acceptances declined 10 basis points to 1.13%, this is an increase compared to 1.06% for the same quarter in 2020.
It comes a day after Commonwealth Bank Managing Director Matt Comyn said the bank was still facing 300-400 loan deferrals a day as the pandemic raged, but it was “low compared to Last year”.
NAB also reported a 2 percent increase in home loans in the quarter, while loans to small and medium businesses were up 4.3 percent.
“The strong economic momentum leading up to this period, continued government support and relatively healthy starting positions from customers give us confidence that once restrictions are relaxed the economy will rebound again,” said McEwan.
Ord Minnett called the result strong but noted that NAB’s market and treasury income was particularly weak.
The bank offloaded its MLC Wealth business a year ago and this week announced it was buying the retail arm of Citi to boost growth plans for its personal loan division.