National Australia Bank says it has booked a 7 per cent rise in underlying profit for the first quarter of its financial year.
The bank says it made $1.55 billion, excluding one-off benefits and losses, mostly relating to treasury shares, revaluations and hedging.
With the one-off factors included, NAB says it made an unaudited statutory net profit of approximately $1.4 billion for the three months to the end of December.
However, the profit growth was not based on rising revenue (up just 1 per cent), which was affected by lower interest margins.
Rather, the bank benefitted from a 23 per cent fall in bad and doubtful debts to $324 million, largely due to lower charges for the Australian banking and UK businesses.
NAB says it has secured $10.1 billion of wholesale funding so far this financial year, with an average term of 5.3 years.
However, it also says it funded all loan growth in the December quarter through customer deposits.
NAB’s chief executive Cameron Clyne says the bank has seen market share growth in both mortgages and household deposits over the quarter, but is yet to see a pick up in business borrowing.
“While recent improvements in business confidence and conditions are encouraging, we are yet to see this translate into a meaningful increase in demand for business credit, and competition in this space remains elevated,” he observed in the report.