Australia’s NAB reports flat profits for first quarter

SYDNEY (AFP/APP): The National Australia Bank (NAB) reported flat profits for the first quarter of its financial year Tuesday, and said ongoing coronavirus lockdowns added to uncertainty going forward.

The bank, one of Australia’s Big Four lenders, said net profits for the quarter ending December 31 were Aus$1.7 billion (US$1.3 billion), comparable to the same period in 2020.

The bank’s preferred measure of cash earnings was Aus$1.65 billion (US$1.29 billion), up 1.0 percent on the corresponding period last year.

But measured against the quarterly average of the second half of 2020, when Australia was still feeling the economic impact of the coronavirus crisis, cash earnings were up 47 percent.

NAB chief executive Ross McEwan said “improving economic trends” were encouraging in Australia and New Zealand as both countries successfully contained the coronavirus pandemic.

“At an underlying level, performance has been sound in the current competitive, low-interest rate environment,” he said, adding that the bank had seen a sharp drop in loan repayment deferrals.

But McEwan said “health alerts” related to outbreaks of Covid-19 in major cities continued to create “uncertainties requiring further clarity”.

Authorities have ordered snap lockdowns in recent weeks in the Australian state capitals of Brisbane, Perth and Melbourne and in New Zealand’s biggest city, Auckland, to prevent the spread of small outbreaks of highly contagious new Covid-19 variants.

The outbreaks have so far been successfully contained.

McEwan said the winding down of government economic support programmes, including so-called Jobkeeper wage subsidies in Australia, added to the uncertainty.

But the bank said the amount of frozen home loans for its customers had plummeted from Aus$38 billion to Aus$2.0 billion and credit impairment charges were down 98 percent from the second half 2020 average.

The Australian economy contracted in the first two quarters of last year in the country’s first recession in nearly three decades.