Why has the NAB share price jumped today?
Shares in the Big Four bank have risen nearly 12% in the last 12 months.
Shares in National Australia Bank (ASX: NAB) are among the most traded shares on the ASX, with the stock climbing nearly 4% higher to $29.52 at the time of writing.
It has also helped the other banking shares maintain their upward momentum, with Commonwealth Bank (ASX: CBA), ANZ (ASX: ANZ) and Westpac (ASX: WBC) all trading higher.
What is boosting the NAB stock price?
NAB became the last of the Big Four banks to report its earnings update on Thursday.
Australia's second-biggest lender posted a better-than-expected 9.1% rise in first-quarter cash profit to $1.8 billion, helped by growth in the home and business lending market, where it took share from other banks.
Revenue increased 8% reflecting higher volumes across housing and business lending, and a recovery in the Markets & Treasury (M&T) income. NAB said it expanded its mortgage portfolio by 2.6% and saw a 3.4% rise in business lending.
Australian banks have been under pressure amid a low rate environment, with competition rising in the home loan market as customers increasingly switch to fixed rate home loans. In recent days, each of NAB's 3 major rivals have outlined pressure on margins.
Like its peers, NAB also suffered margin pressure, although to a lesser extent. The net interest margin declined 5 basis points to 1.64%, including a modest negative impact from treasury and markets and the cost of a deeper pool of liquid assets.
Optimistic outlook
CEO Ross McEwan shrugged off the challenges caused by disruptions to supply chains and labour markets due to the recent spread of Omicron.
"We remain optimistic about the outlook for Australia and New Zealand and are well positioned to continue to grow with a strong balance sheet and disciplined execution of a clear strategy," he said in a statement to the ASX.
NAB said it continued to target broadly flat expenses in 2022, despite emerging inflationary pressures. Expenses increased 2%, mainly reflecting higher salaries, leave costs and investment to support growth.
The group's common equity tier 1 capital ratio was lower at 12.4% at December-end, due to the impact from dividend payments and a continuing share buyback, but is still well above the banking regulator's 10.5% "unquestionably strong" threshold.
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