Bulletin: NAB Can Handle Earnings Hit From COVID Provisions

SYDNEY (S&P Global Ratings) Nov. 5, 2020--Australia-based National Australia Bank Ltd.'s (NAB; AA-/Negative/A-1+) earnings should remain sufficient to absorb elevated credit losses in the next two years, S&P Global Ratings said today. The bank, one of Australia's four major lenders, announced today that its cash earnings (excluding large notable items) for the full year ended Sept. 30, 2020, fell by 26% compared with the previous financial year. The hit from increased credit impairment charges due to COVID-19 were broadly in line with our expectations. We believe that realized credit losses in the banking system are likely to increase next year after a reduction in support to stressed borrowers from two channels: fiscal support from the government, and the loan repayment

...November 4, 2020 SYDNEY (S&P Global Ratings) Nov. 5, 2020--Australia-based National Australia Bank Ltd.'s (NAB; ##-/Negative/A-1+) earnings should remain sufficient to absorb elevated credit losses in the next two years, S&P Global Ratings said today. The bank, one of Australia's four major lenders, announced today that its cash earnings (excluding large notable items) for the full year ended Sept. 30, 2020, fell by 26% compared with the previous financial year. The hit from increased credit impairment charges due to COVID-19 were broadly in line with our expectations. We believe that realized credit losses in the banking system are likely to increase next year after a reduction in support to stressed borrowers from two channels: fiscal support from the government, and the loan repayment moratoriums extended by the banks. To this end, NAB's credit impairment charges for the year increased to 46 basis points of gross loans as of Sept. 30, 2020, reflecting uncertainty in the outlook for an...

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