Here are 3 key takeaways from NAB’s 2023 results that all investors should note

Nick Sundich Nick Sundich, November 9, 2023

Today, we got to see NAB‘s 2023 results. The bank, which uses an October to September financial year (which is why it is releasing its result today), made a $7.4bn profit (up 8%) and paid total dividends of $1.67, representing a yield of over 5%.

Given the bank’s magnitude of retail investors, most shareholders will likely take their dividends and either sit back or run. But we think there is some food for thought to digest from the bank’s results – some of which, the bank admitted itself.


3 key takeaways from NAB’s 2023 results


1. The mortgage wars aren’t over (yet)

Yes, the mortgage wars are in a different state to 6 months ago, but it has some way to go. Even though banks are no longer offering the cashback offers that they were this time last year, there are still multitudes of customers with low fixed rates expiring and shopping around for a better deal.

NAB told investors it was retaining 85-90% of these customers. That so much is pleasing, although the bank’s profit in the personal division (which provides home loans) fell 18.4% in the second half of 2023 compared to the first.

In our view, the mortgage wars will only be ‘over’ in 18 months time when the vast majority of cheap mortgages will have expired.


2. There’s high pressure on costs

NAB’s NIM fell 6 basis points to 1.71%. This is of course because of the mortgage wars, but not exclusively. NAB’s overall costs were up 9.1%. Yes, this included the Citi acquisition, a new federal scheme to cover customer losses beyond the banking sector, but also higher staff costs and technology investments.


3. The economy isn’t in as bad a shape as we may not think

At least if the bank’s results are anything to go by. Overall, the majority of consumers are coping with increased interest rates. And business lending is going up, by 8% year on year. NAB is the leading business bank in Australia and told investors this morning it would invest more money in this segment going forward.


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