National Australia Bank made a $1.7 billion net profit for the three months to June, up from $1.2 billion for the same time next year.
The bank’s cash profit for the quarter was $1.5 billion, an increase of around two per cent on the previous quarter.
In a statement, NAB said it increased revenue by around one per cent during the quarter due to growth in mortgages and improved customer margins.
The margins are key to the profits the banks make on their loans.
Expenses were up two per cent due, in part, to costs relating to changes to the company’s organisational structure.
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National Australia Bank group chief executive Cameron Clyne said the company had continued to increase its share of the mortgage market, although conditions in the business banking sector remained subdued.
“Operating conditions for business banking are challenging, with ongoing weak confidence and subdued volumes,” he said.
NAB said business banking earnings were flat on the quarter with lower revenues.
But cash earnings from the bank’s personal banking arm were higher due to the growth in mortgaged lending.
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Wholesale banking earnings were slightly lower in the quarter due, in part, to reduced customer activity.
The bank said the charge for bad and doubtful debts in the quarter was $489 million, down 10 per cent, due to lower charges in Business Banking and UK businesses.
In other earnings results, insurer QBE has posted a 37 per cent fall in half year net profit due to lower investment yields and adverse claims.
QBE made a net profit of $US477 million ($A521.85 million) for the six months to June 30, down from $US760m for the same period last year.
The insurer said the weaker result was in line with expectations and was due to lower investment yields and the impact of $US178m of adverse prior year claims development.
But the company reaffirmed its full year target of a 92 per cent combined operating ratio and 11 per cent insurance margin.
It said it expected premium rates to rise between four and five per cent, on average, across its Australian, New Zealand and US operations.
“We remain on track to deliver what we anticipate will be top quartile performance in the global non-life insurance market,” QBE Group Chief Executive Officer John Neal said in a statement today.
“We are making good progress in improving key capital ratios and metrics, together with the overarching strength of our balance sheet, and we are pleased with the progress being made on the first phase of our operational transformation program.”
