NAB -0.76%: The 3rd and final of the Big 4 banks to report FY21 results today with NAB confirming a very strong bounce back post COVID with cash earnings up 38.6% to $6.558b – a slight beat to market expectations while the 67cps dividend was also a beat, taking the full year dividend to $1.27. Capital levels are also very strong with a CET1 capital ratio of 12.25% which well above the APRA 10.5% ‘unquestionably strong’ threshold. There is also a $2.5b share buyback underway, with $2.0b remaining, so why was the stock down? Markets and treasury income declined by $228m in the second half – resulting in net operating income reducing from $8,884m in FY20 to $8,367m in FY21. Net interest margin also declined from 1.78% to 1.69% (FY21 v FY20) with NAB expecting a similar number in FY22 before a recovery in FY23. All in all, a strong recovery however that half of half trajectory has softened and margins are still under pressure.
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Performance update for March, stocks that drove returns & our current positioning
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Wednesday 17th April – ASX200 +15pts, Evolution (EVN), Rio Tinto (RIO) & BOQ
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Market Matters Research Lead Shawn Hickman with David Koch
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Wednesday 27th April – DOW up 63pts, SPI down -23pts
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MM is neutral NAB preferring BOQ at current prices
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