National Australia Bank will step up efforts to originate more new business via proprietary channels, CEO Andrew Irvine said yesterday.
‘We need to be a really good proprietary home loan bank. We haven’t been and we need to be” Irvine said on the analysts call.
Data shared in the investor presentation shows that, for mortgage finance, the bank’s proprietary channel sourced 46.8 per cent of NAB’s housing lending over the year to September 2024, on a portfolio basis. This is down from 52.3 per cent in March 2023.
On a drawdowns basis, proprietary lending accounted 38.9 per cent of home finance flows over the September 2023 half. This is an improvement on 35.7 per cent and 35.1 per cent over the two prior halves.
NAB’s residential lending grew below system over the year, up only 1.5 per cent over 12 months and up 0.4 per cent over six months.
The bank’s credit card book decreased to $8.7 billion at September, down from $9.0 billion six months ago, which makes you wonder how well the Citi retail integration is working out. Still, NAB estimated its credit card market share at 27.5 per cent, up 110 bps over 12 months, so NAB may be doing okay in a shrinking market.
Underlying profits were up in the second half in 3 of the bank’s 4 divisions. Business & Private Banking profit lifted 2.5 per cent to $2.6 billion; Personal Banking lifted 5.6 per cent to $1.0 billion and Corporate & Institutional Banking lifted 1.9 per cent to $1.2 billion.
Bank of New Zealand’s profit went backwards by 3.5 per cent to A$1.1 billion.
However, NAB’s group net profit fell 6.1 per cent to $6.96 billion in FY2024.
The soft spot in the NAB results is that arrears increased markedly.
Home loans 30 days or more past due were 1.82 per cent at September, up from 1.41 per cent a year before.
Loans 90 days or more past due were 1.08 per cent at September, up from 0.76 per cent 12 months before.