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The ASX stock market is currently experiencing high volatility. Is the National Australia Bank Ltd (ASX:NAB) Could the stock price be an opportunity?
Friday, the S&P/ASX 200 Index (ASX:XJO) had one of its worst days in the past two years.
NAB shares also fell on Friday. But, as of this writing, the bank is up about 7.5% year-to-date.
Last week, NAB released its half-year result for FY22 and managed to achieve growth. Before we get to broker ratings on the bank, let’s look at how the bank has performed.
NAB reported a statutory net profit after tax (NPAT) of $3.55 billion. Cash profits rose 4.1% to $3.48 billion. Revenue increased by 4.6%, benefiting “from pricing discipline and strong growth in loans and deposits which increased by 10% and 12% respectively” compared to the previous corresponding period.
The bank has invested to deliver productivity gains. It said it reset its FY22 cost growth target to around 2% to 3% to ensure it drives shareholder returns while balancing cost disciplines and growth opportunities. growth. Indeed, NAB’s share price is up 18% since this time last year.
NAB said net interest margin (NIM) fell 11 basis points to 1.63%. However, excluding the impact of markets and cash, and the increase in holdings of liquid assets, the NMI fell by 3 basis points. NAB said this reflected competitive pressures and “mix issues” in home loans, partly offset by lower deposit and funding costs.
The bank’s credit impact charge was $2 million. However, NAB said it was seeing improving asset quality across Australian loan exposures and low specific charges. The ratio of loans past due more than 90 days fell 48 basis points to 0.75%.
NAB’s board of directors decided to declare an all-frank interim dividend of 73 cents per share, down from 60 cents per share. At the current NAB share price, its current premium dividend yield is 6.1%.
Regarding its outlook, the bank said:
We are optimistic about the future and well positioned for a changing environment in FY22 and FY23. Disciplined execution of our strategy and investing to deliver better results for clients and colleagues remains our primary focus for enable us to drive sustainable growth across our business and enhance shareholder returns.
Is NAB’s stock price a buy?
Brokers are somewhat mixed on the company.
Ord Minnett is currently pricing NAB shares as a buy, with a price target of $34.50. The broker thought the result was good.
Morgan Stanley is currently “equal weight” on the big four ASX banks, with a price target of $31.80.
Credit Suisse is neutral on NAB, with a price target of $32.40. While NAB should benefit from rising interest rates, the brokerage noted that NAB expects spending growth.