The National Australia Bank (NAB) has posted an annual profit of AU$7.1 billion, driven by the success of its commercial lending division.
However, compared to the AU$7.7 billion the year before, NAB saw a 7.7% decrease in cash earnings for the year ending Sept. 30, reported Business Times.
Despite the decline, NAB’s yearly profits were within expert estimates. By carefully handling the competition, the bank managed to stay afloat and maintain profit margins.
“Despite headwinds, Australia’s economy is in reasonable shape and we are optimistic about the longer-term outlook for Australia,” chief executive officer Andrew Irvine said.
Although its clients were surviving the economic downturn, NAB, the country’s biggest business lender and third-largest retail lender, stated that an increase in late loan repayments among residential and commercial borrowers was concerning.
NAB expected interest rates in Australia will decline despite this, Reuters reports.
“You’re probably going to see stronger economic growth in the U.S.,” Irvine said. “The thing we’re going to have to watch for is what does that mean for inflation and what does that mean for interest rates? If the U.S. economy is stronger the rates won’t come down as hard there as maybe markets were expecting, and that could have implications (for) the rest of the global economy.”
Interest rates are expected to be lowered for the first time in five years in February or March 2025, according to major Australian banks. This prediction comes as the Reserve Bank of Australia estimates that even while inflation in Australia has decreased recently, it won’t be completely under control until 2026.
