With energy prices rising, switch to a cheaper plan
Compare Prices Now

What is weighing on the NAB share price?

Posted: 7 June 2021 12:31 pm

Shares in the Big Four bank have rebounded nearly 20% in the last 6 months.

Shares in most of the major banks were trading slightly lower on Monday, but the losses in National Australia Bank (ASX: NAB) were particularly conspicuous. At the time of writing, the NAB stock was down 2.8% to $26.75.

Why is the NAB share price under pressure?

Investor sentiment has likely turned weaker after Australia’s third-biggest bank found itself firmly in the cross sights of the financial crimes regulator.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) on Monday said it has identified serious concerns with the bank's compliance with anti-money laundering and counter-terrorism financing laws and had begun an investigation.

The regulator said it had concerns over "potential serious and ongoing non-compliance" with customer identification procedures, customer due diligence and compliance.

NAB had self-reported the shortcomings in its anti-money laundering systems to the regulator in 2017 and has been engaging with AUSTRAC since then on strengthening its processes.

NAB CEO Ross McEwan said the bank would continue to cooperate with AUSTRAC in its investigations.

“NAB takes its financial crime obligations seriously. We are very aware that we need to further improve our performance in relation to these matters. We have been working to improve and clearly have more to do,” he said in a statement to the ASX.

Enforcement costs loom

AUSTRAC has not made any decision about whether or not enforcement action would be taken, the lender said on Monday.

The regulator is not considering civil penalty proceedings at this stage, which was "reflective of the work undertaken" by NAB to date, it added.

However, investors are likely not convinced that this would be the end of the matter. A similar case involving bigger rival Westpac was settled last year with the lender agreeing to a $1.3 billion penalty in a case involving millions of anti-money laundering failings.

While the Westpac case cannot be taken as a precedent for NAB’s dealings with AUSTRAC, investors would be rightly worried about any looming costs related to the case.

That could take the shine off NAB, which last month reported a half year statutory net profit of $3.2 billion, more than double the $1.3 billion recorded during the same period last year.

NAB shares have jumped nearly 20% over the last 6 months as investors bet the impact of the coronavirus downturn is behind the lender.

Considering buying NAB shares?

If you are keen to buy NAB shares, you should consider investing through an online share trading platform.

Not all platforms offer the same list of stocks. Some trading platforms offer US stocks only, so make sure to select a platform that offers ASX-listed stocks.

Choose from the dozens available for Australian investors. Compare the features and fees from the plethora of trading platforms available for Australian investors.

Looking for a low-cost online broker to invest in the stock market? Compare share trading platforms to start investing in stocks and ETFs.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

Get more from Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site