NAB’s loan deferrals have declined to nearly A$2bn for businesses and $1bn for mortgage owners as of 31 December 2020

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NAB headquarters in Docklands, Melbourne, Australia. (Credit: Decryption512 at English Wikipedia.)

National Australia Bank (NAB) has reported a 47% rise in cash earnings in its first quarter (Q1) 2021 trading update.

The bank reported an unaudited statutory net profit of A$1.7bn and unaudited cash earnings of $1.65bn for the reported quarter, which remained almost flat compared to the previous year.

NAB updated that its loan deferrals have declined to nearly A$2bn for businesses and A$1bn for mortgage owners as of 31 December, compared to A$19bn for business and A$38bn for home loans.

NAB CEO Ross Mc Ewan said: “Improving economic trends have been a key driver of our 1Q21 result, with cash earnings 47% higher than the 2H20 quarterly average primarily driven by low credit impairment charges.

“At an underlying level, performance has been sound in the current competitive, low-interest-rate environment.

NAB helped more than 4,000 of its customers buy their first home under the federal government’s first home loan deposit scheme.

The scheme allows first home buyers to pay only a 5% deposit and eliminates the need to pay for costly lenders mortgage insurance, said the company.

The bank reported the Group Common Equity Tier 1 ratio (CET1) of 11.7%, which increased compared to 11.5% in September 2020.

Furthermore, the company’s Leverage ratio (APRA basis) was 5.9%, Liquidity Coverage Ratio (LCR) quarterly average was 147%, and Net Stable Funding Ratio (NSFR) was 127%.

Mc Ewan added: “Improving economic and health outcomes in Australia and New Zealand are encouraging, as are the reductions we are seeing in deferral balances. However, there are still a number of uncertainties requiring further clarity.

“Implementation of our strategy is proceeding well as we invest for the long term and focus on initiatives that make a real difference to our customers and colleagues.

“While there is still much to do, it is pleasing to see momentum building in our core businesses as we simplify and streamline our processes and policies and enhance our digital offerings.”

Last month, the company has reached a scheme implementation agreement to take full control of the holding company of Australian neobank 86 400.