NAB reveals 70% of its customers are ahead on mortgage repayments

National Australia Bank has revealed 70% of its customers are ahead on their home loan repayments, despite recent interest rate rises.

Releasing its third quarter trading update 2022, NAB said cash earnings rose 3% compared with the 1H22 quarterly average and lending and deposit momentum continued (up 2% and 4% respectively over the June quarter excluding the Citi acquisition). NAB has also delivered a $1.85bn net quarterly profit.

“Our performance this quarter is pleasing, highlighting the ongoing execution of our strategy including completing the acquisition of Citigroup’s Australian consumer business,” said NAB CEO Ross McEwan (pictured above).

“As the economy changes, continued low unemployment and healthy household and business balance sheets are helping mitigate the impacts of higher inflation and higher interest rates.”

McEwan said the majority of NAB customers were well placed to manage these challenges.

“Approximately 70% of customer home loan repayments are ahead of schedule,” he said.

“For those customers who need our support, we have a range of options available.”

Read more: New rate changes at NAB, ANZ

McEwan said NAB was also in good shape for this evolving environment.

“Balance sheet settings remain strong and we are well advanced on our FY22 term wholesale funding task with $34bn raised by end June,” he said.

“Investments to deliver simpler, more digital experiences for customers and colleagues are supporting balanced growth and productivity benefits which are expected to exceed $400m in FY22.”

McEwan said NAB had a clear strategy and executing this with discipline was its key priority.

“We will continue to focus on getting the basics right, managing our bank safely and improving customer and colleague outcomes to deliver sustainable growth and improved shareholder returns,” he said.

Read more: NAB becomes most certified Microsoft customer in Australia, NZ

NAB said it was supporting its customers manage higher interest rates and cost of living pressures with options such as adjusting loan repayments, accessing available redraw, fixing or splitting a loan and hardship support via NAB Assist.

The big four bank is also helping flood-affected communities in NSW and Queensland with $4.85m of disaster relief funding provided since February and the rebuilding of its Lismore branch, which was scheduled to reopen in August.

The bank said it was also continuing to demonstrate its long-term commitment to green financing, with NAB issuing a €1 billion green bond in May to help fund initiatives such as renewable energy projects and green buildings.

NAB’s strategic net promoter score (NPS) from March 2022 to June 2022 was stable for Consumer NPS at -1 (ranking remained first of major banks) and fell six points for Business NPS to -6 (ranking remained second of major banks)

NAB 3Q22 financial highlights include:

  • $1.85bn unaudited statutory net profit
  • $1.80bn unaudited cash earnings
  • 6% cash earnings growth vs 3Q21
  • 11.6% group common equity Tier 1 ratio (CET1)