The share price of Australia’s largest bank skyrocketed to record high after reporting a 16% increase in its first-quarter cash earnings on Wednesday. The stock of National Australia Bank Limited (NAB) hit a high of $47.96 on Wednesday and closed at $47.21, up by more than 4%. Strong Quarterly Profit The rally comes amid the top lender’s strong quarterly profit. NAB posted cash earnings of A$2.02 billion, or $1.43 billion, for the quarter that ended December 31, up from the A$1.74 billion reported a year ago. ”NAB is well placed to manage our bank for the long term and to support our customers, while delivering sustainable growth and returns for shareholders,” said NAB CEO Andrew Irvine, according to Reuters. Performance in Business and Home Lending Segments NAB’s strong quarterly performance is supported by growth in its business and home lending divisions. The bank’s business banking witnessed a 7% increase in quarterly volume while its business and private banking segment saw 3% growth. According to the latest data from the Australian Prudential Regulation Authority, NAB now accounts for 21.6% of the business banking market share while its peers, Westpac Banking Corporation and the ANZ Group, account for 16.6% and 12.5% of the market share, respectively. Quarterly housing loan volume is also up by 5% . Beating Estimates According to UBS analyst John Storey, the results reflected a record quarter for the lender. He said that the results beat market consensus, including UBS’s own estimates by 10.5 percent when accounting for net profit after tax and by 8.5% when accounting for profit less the potential bad debts. JPMorgan analyst Andrew Triggs said the market expected a solid performance from NAB given the strong results from its rivals, but the bank outperformed the others with its strong financial results. “The result puts NAB firmly at the top of peer revenue growth trends in the quarter, and this is likely to drive at least low-single-digit earnings upgrades for consensus, in our view,” he said , according to the Australian Financial Review.
