National Australia Bank has recorded a 94 per cent jump in first-half cash earnings to $3.3 billion, becoming the latest of the major banks to post a rebound in fortunes amid improving economic conditions.
Australia's third-largest lender also reported statutory net profit for the six months to March 31 more than doubled to $3.2 billion, in part after it wound back some of the additional provisions taken last year.
"Our 1H21 result reflects the improving conditions, with cash earnings ... benefiting from significantly better credit impairment outcomes," chief executive Ross McEwan said in a statement.
Like other major Australian banks, NAB's profit plunged last year after it was forced to make higher provisions to cover for higher potential defaults due to the COVID-19 disruptions.
But that hasn't materialised as business activity has picked up and prices in the key housing market have been resurgent.
NAB said it wrote back provisions of $128 million in the first half, compared with a $1.2 billion charge a year ago.
"The rebound in the Australian and New Zealand economies from COVID 19 has been better than expected," Mr McEwan said.
"This along with the vaccine rollout and continued strong health outcomes, make us optimistic about the outlook."
While the economic outlook had improved, the sustainability of the recovery remained uncertain and the impact on customers had been uneven, Mr McEwan warned.
Cash earnings at its key business banking segment were down 10.3 per cent from a year ago to $1.2 billion.
By contrast, NAB's personal banking unit saw cash earnings rise 14.1 per cent from a year ago to $859 million due to reduced credit impairment charges and low funding costs.
Operating revenue for the half-year dipped 1.5 per cent to $8.26 billion.
The lender will pay a first-half dividend of 60 cents a share, double the amount it paid for the same period last year, when it was forced to slash the payout due to economic uncertainty.
NAB H1 PROFIT BOUNCES BACK
* Cash earnings up 94pct to $3.3bn
* Net profit up 144pct to $3.2bn
* Operating revenue down 1.5pct to $8.26bn
* Fully-franked interim dividend 60 cents/sh vs 30 cents year ago.
