Analysts are expected to be sharpening their pencils to give the overall Australian banking sector an upgrade, with the National Australia Bank first off the full-year reporting rank to deliver profits beyond forecast expectations yesterday.
The big four Australian banks, NAB, Commonwealth Bank of Australia, Westpac and ANZ, had weathered the global financial crisis relatively well and, while down on last year's results, were all expected to deliver better than forecast after-tax profits and increasing dividends for the full year, Craigs Investment Partners broker Peter McIntyre said.
NAB yesterday booked a cash after-tax profit of $A3.8 billion ($NZ4.72 billion) and, after making provisioning to set aside $A542 million for New Zealand tax-related litigation, it booked an after-tax profit of $2.6 billion, an almost 43% decline on last year's result.
Its dividend fell almost 25%, from $A1.46 to A73c.
Mr McIntyre said NAB got better margins on its lending to homeowners than expected and having less bad debts on its books than the markets expected had buoyed its the bottom-line.
"Analysts are looking at this first [bank] result and are expecting the whole Australian banking sector to be upgraded in the near future," he said.
NAB's New Zealand subsidiary, the Bank of New Zealand, booked a cash after-tax profit of $NZ703 million, but after provisioning for a one-off tax-related cost of $661 million, the BNZ recorded a $181 million loss.
Mr McIntyre said parent NAB's result was also notable in that its lending, through its United Kingdom business, was up 6%-9% in spite of the recession and global credit crunch, and underlying profits were 529 million ($NZ1.17 billion).
But Britain's deepest recession since World War 2 was reflected in "bad and doubtful" debts to NAB increasing from 175 million to 421 million.
